Michaelia Cash (WA, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I rise today, on behalf of the opposition, to speak to the National Reconstruction Fund Corporation Bill 2023. The coalition will be opposing this bill. Why are we opposing this bill? It's because the bill is from an arrogant government which believes that it can tell the manufacturers of Australia what they need, rather than addressing with good and proper policy what the manufacturers of Australia are telling the government—because they're out there, I assure you—they require. If the government just listened to the manufacturers of Australia, what it would know is that they are asking the government to put in place the right economic conditions for them to succeed. This of course includes driving down the increasing input costs being felt by businesses and driving down the inflationary pressures that are currently pinching the family budget and projected, unfortunately, to only get worse.

What the Australian people and in particular manufacturers in Australia are now seeing is that our economy and the Australian people are being woefully let down by this bad government. This bill does nothing for Australian businesses struggling to meet ever-increasing input costs. This bill does nothing for Australian families, who, day after day, are telling the government they are struggling to meet the rising costs of living. Inflationary pressures are pushing businesses and households to the brink and electricity prices are skyrocketing, and what's the government's answer? To push radical industrial relations changes and bake in off-budget costs, which the IMF has warned will have an inflationary impact. This bill that we have before us in the Senate does nothing to address inflationary pressures or power prices. In fact, the bill that we have before us in the Senate today will actually make these economic challenges even worse—an absolute disgrace. The International Monetary Fund has explicitly warned the Albanese government to avoid off-budget spending vehicles such as that which will be established by this legislation. Let's have a look at that again: the IMF has explicitly warned the Albanese government to avoid—not go ahead and legislate—off-budget spending vehicles such as that which will now be established if this legislation passes the Senate.

In fact, when asked in Senate estimates if the department had done any inflation modelling, the response by the department was quite frankly startling. This is what they said: 'No, we haven't. It was a very simple response. When asked the direct question, 'Have you done any inflationary modelling?' the department officials said, 'No, we haven't.' When pressed on why, because we went further and said, 'Hold on. If you haven't actually done any inflationary modelling, we now need to ask you why,' it actually got even worse.

Jonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | Link to this | Hansard source

Tell us.

Michaelia Cash (WA, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

They said, Senator Duniam, 'Because it's not necessary.'

Jonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | Link to this | Hansard source

You're kidding!

Michaelia Cash (WA, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I'm not kidding. The departmental officials said—I'm assuming based on the instruction, though, of the Labor government—'It is not necessary.' On behalf of all Australians, who just want to see proper process from this government, who want transparency and integrity, that is an absolute disgrace.

What is worse is that energy experts are also telling the government to unlock further supplies of gas, but, as we know today, the one word that has been missing in the argument in terms of gas is 'supply'. You need to unlock further supplies of gas. That's what the energy experts are telling this government, but all we've seen and what we're going to witness is a dodgy deal done with the Australian Greens to prevent the NRF from actually assisting in that matter. You have the energy experts of Australia, who actually want to help Australians, wanting to get more gas into the market because, as we know, getting more gas into the market will actually put downward pressure on prices. That is what the energy experts want. Instead, the left-wing government and the even further left Australian Greens have done a dodgy deal to prevent the NRF assisting in that matter. You have a minister that talks big about value add onshore but, as soon as he goes and sits down at his desk, he just sells out. The desperate, dodgy deal with the Australian Greens is proof of that. The minister is selling out Australian manufacturers—and I say shame on you—to save his pride, and he is now recklessly pushing this bill through the Australian Senate.

What this bill demonstrates not just to the Australian people but in particular to Australian manufacturers is that the Labor Party will always talk the talk. They did a lot of talking before the May 2022 election. I don't have time, unfortunately, to go through the number of now-broken promises. But I do have to mention the fact that even yesterday, in the Australian Senate, Minister Farrell, representing the Prime Minister of this country, was asked a very simple question: 'Can you actually say the words "two hundred and seventy-five"?' He was asked, 'Can you actually read out the highlighted part of your policy that refers to your promise prior to the election to reduce Australians' energy bills by $275?' and he couldn't even do that. So they can talk the talk on supporting Australian manufacturers but, when looking to implement policy, they cannot walk the walk. In fact, the policy they look to implement is going to have a detrimental impact on manufacturers and, ultimately, Australians.

The government continue to refuse to rise to the occasion and address the key economic challenges which are holding industry back. This sort of government spending does nothing to improve the situation. In fact, any financial support that is ultimately provided will end up being whittled away by the increased costs that are put on industry. Money goes into one pocket, but the bad news is that it just gets transferred through and falls out the other pocket. It's very simple, and manufacturers in Australia will tell you: input costs affect the bottom line. I think anybody would know that. Quite frankly, I think someone doing Economics 101 would understand that. And the price of energy is the first among those input costs for many of our manufacturers. When I go around the country, as I know my colleagues do, at every single meeting I have with businesses they talk about the rising costs of energy as a concern.

All of these underlying issues make it even more unbelievable that the government would sell out our resources industry. In a recent survey conducted by the Ai Group, 83 per cent of survey respondents said they were experiencing rising energy prices. Solaris Paper, a company that has been manufacturing in Australia since the 1950s, including a product people will be very familiar with, Sorbent toilet paper, are facing—wait for this—a tripling of their gas bill. That is an input cost. It means money goes in and then, unfortunately, it comes out reduced at the other end. Sorbent toilet paper: a triple gas bill!

Advance Bricks have announced that, after 82 years in business, they will let their brick oven go cold. You have to be kidding me! After 82 years of being in business, because of the actions of the Albanese Labor government, they are going to let their brick oven go cold. You've got to ask why, Madam Acting Deputy President. Why would you make such a decision after 82 years? It's because, overnight, they have gone from paying $6 for a gigajoule of gas to paying more than $37 a gigajoule. In going from $6 to $37, the only decision you can make, after 82 years, is to let your brick oven go cold. That is an absolute disgrace! What this bill is now saying to all those manufacturers out there is: there is no hope for you, and in particular there is no hope for you when you are a second-generation family business like Advance Bricks.

So many of our manufacturers rely on gas, yet what we have is the Albanese Labor government demonising the gas suppliers. When you demonise the gas suppliers, you don't get additional supply into the market; it does nothing but drive prices up. The Minister for Industry and Science seems to think that he can shirtfront gas companies into submission and, as a result, prices will drop. Then we have the Minister for Resources running around saying exactly the opposite. It is actually getting very confusing for the companies out there, and it's not just confusing in Australia. That confusion has a flow-on effect to global decisions that are being made. We don't operate in isolation. We might be an island and we might like to think we operate in isolation—seriously, those on the other side seem to think we operate in isolation—but we don't. The decisions made in this country can ultimately have a flow-on effect globally.

I have to say, though, it's unsurprising that this dodgy deal passed the parliament while the resources minister was overseas in India, because the resources minister has one view and the minister for industry has another view. What that type of contradiction between government ministers does for those who are impacted by this policy is create uncertainty for industry. This government doesn't seem to understand that uncertainty for industry is bad. Quite frankly, I think people are becoming quite used to that, because almost everything this government does pits our manufacturers against succeeding. Whether it be the safeguard mechanism, their industrial relations policy or their failure to properly manage the economy, they are letting the manufacturers of this great nation down in a woeful and quite frankly inexcusable way. And, as I said, this bill actually does nothing for them. It does nothing to address what the manufacturers are telling the government they need from them.

The government frame this bill as being a blue-collar bill, but it's actually not that. Small and medium manufacturers do not want loans or equity from government. They want lower input costs, access to workers and a fix to our disrupted supply chain. That's what they're telling the government. The reality is that the Labor Party, in so many ways, misled the Australian people—that is now becoming very obvious—prior to the last election by saying they would reduce people's energy prices. If they listened to our manufacturers, they would know that these are the issues manufacturers demand action on, instead of arrogantly bringing a bill to the Australian parliament in which they are hellbent on telling manufacturers what they believe they need. Look at what, say, the Australian Chamber of Commerce and Industry said: 'It would be a particularly damaging, given the already serious global risks and uncertainty.' Again, this government does not listen. It does not listen. The time it takes to establish the NRF will cumulatively cost our manufacturers some two years before they start seeing any government support for their work.

The government has modelled the National Reconstruction Fund on the Clean Energy Finance Corporation, known as the CEFC. After that legislation passed the parliament in August 2012, the first investment was made in June 2013, some 10 months later. The government claims that this legislation will get Australian manufacturing moving again. Again, based on past form, we can tell you that is not going to be the case. It will not do anything this financial year, it probably won't even do anything next financial year, and it certainly does not address those issues which manufacturers are telling those opposite they urgently need addressed now. That is why the government has yet to commit to a time line. This is lost time for our manufacturers, for prospective workers and for our economy, and it dampens prospects for investment. But, of course, what the government were quick to do was dismantle the policies they were working on under the coalition's Modern Manufacturing strategy. In fact, they were so spitefully partisan when they took an axe to those successful programs, and they've held many projects in limbo. That is, quite frankly, an absolute disgrace.

We obviously have stated that we will be moving a number of amendments to this bill. They will seek to increase the woeful lack of transparency and accountability in this bill. They will provide certainty to industries, which this government is seeking to just leave behind. We will obviously move an amendment to seek to remove from this bill the government's dodgy deal with the Greens. Why would we be doing that? Because the Greens amendment, which the government is agreeing to, is going to have serious consequences for the economy, it demonises the resources and forestry sectors, and it is an absolute disgrace. If the government supports this, quite frankly, anyone in the resources and forestry sector in Australia should not vote for this government at the next election. On that basis, again, we are not supporting this bill. This is bad policy.

Penny Allman-Payne (Queensland, Australian Greens) Share this | Link to this | Hansard source

I also rise to speak to the National Reconstruction Fund Corporation Bill 2023. In 2022, the Greens took a policy to the federal election to create a $15 billion 'Made in Australia' bank and manufacturing fund, designed to rebuild Australia's neglected manufacturing base and to decarbonise existing Australian manufacturing by significantly reducing emissions in industrial processes. The 'Made in Australia' bank would support and finance manufacturing, innovation, industrial carbonisation and relocalisation of supply chains. The 'Made in Australia' bank and manufacturing fund was born out of a need the Greens have heard from people and communities around the country, especially in places like Latrobe, the Hunter and my own community of Gladstone, for the government to take leadership in fostering a local manufacturing industry that contributes to decarbonisation while providing economic opportunity to often neglected regions.

With an amendment secured by the Greens, we have ensured that, regardless of who is in government, the National Reconstruction Fund will be used to fund to the future of manufacturing and not finance coal and gas or native forest logging. Our amendment has ensured that financing of coal and gas, construction of gas pipelines and the logging of native forests are prohibited investments for the National Reconstruction Fund. The Greens have also secured an amendment that investments made by the National Reconstruction Fund board must align with the legislated climate targets and any future updated commitment by Australia under the Paris Agreement. These amendments mean that National Reconstruction Fund will be focused on its goal of creating high-quality jobs across a diverse economy.

As a regional Queensland senator, I know how important these jobs are for communities. Living in Gladstone, I've seen firsthand the impact that rises and falls in economic circumstances can have on local industries, the people who work in them and their communities. Repeated boom and bust cycles which are dictated by international markets and the whims of unaccountable multinational corporations can be devastating for the economic and social health of our regions. They deserve better. People in communities like mine deserve good, secure and well-paid jobs in innovative, locally owned industries that are there for the long term. Workers should feel secure enough to put down roots and trust that that community will continue to thrive, encouraged by a booming industry. Young people living in those communities should have the ability to remain there, moving into secure, well-paid work when they leave school.

Because of the amendments secured by the Greens, today the National Reconstruction Fund reflects most of the core spirit of the Greens' 'Made in Australia' bank. The NRF will set aside $15 billion to help rebuild an industrial base in Australia. The NRF will have seven priority areas, with $3 billion set aside for renewables and low-emissions technologies, $1½ billion for medical manufacturing, $1 billion for value adding in resources, $1 billion in critical technologies, $1 billion for advanced technology and $500 million for value adding in agriculture. Most importantly, it will not be used as a slush fund for coal and gas corporations or native forest logging.

When they were in government, the coalition tried to use public money to fund coal and gas through the Clean Energy Finance Corporation and ARENA, but they were unable to do so because of the guardrails the Greens and Labor had put in place. This was a deliberate intervention the Greens made then, and it worked. The Abbott-Turnbull-Morrison governments could not poison the well of the Clean Energy Finance Corporation to prop up coal and gas. Now the NRF will be similarly protected. It will be focused on genuinely fostering Australian industry instead of padding the bank accounts of coal and gas executives. The opportunity and future of manufacturing lies in renewable technology.

Governments decide what industries to nurture and want to let die. In the past decade, the coalition made a deliberate choice to accelerate the death of the car industry Australia. This was a choice, motivated in part by the supposed benefits of free trade by losing the good, secure, unionised jobs that comprised manufacturing. This choice was made by a government without regard for how closure of the industry would devastate communities reliant on the jobs provided by those manufacturers. Now Australia ranks 91st amongst countries for economic complexity. What this actually means is we have sacrificed our manufacturing industry and our self-sufficiency. In its place, we've chosen to organise our entire economic and industrial capacity around digging up and shipping out coal and gas on behalf of tax-dodging fossil fuel corporations.

Industry policy is about choices. The decision to accelerate the death of car manufacturing in Australia was made for the short-term gain of the ideology of free trade and weakened worker strength at the expense of our own industrial capacity. We have an opportunity and the resources to really seriously tackle transition. Like the rug being pulled out from under car manufacturing, the rug is also about to be pulled out from under coal and gas workers. Workers across regional Australia know that a transition to low-emissions industries will happen. The Greens want well-paid, stable employment for people in communities currently engaged in the fossil fuel industry, and we're working to secure that future so workers will have opportunities for gainful employment in other industries. Our proposed national energy transition authority is a serious body designed to centre workers in this work.

The Greens are the only party facing the reality of the energy transition and we're the only party that took a comprehensive and costed transition plan to the election. As a senator from regional Queensland, I'm here to make sure that our communities are put first, not coal and gas corporations.

While the previous government decided to let our local car manufacturing die, they did not extend this fate to the fossil fuel industry. While manufacturing has struggled, successive governments have heaped billions and billions of public subsidies onto fossil fuel companies. Coal and gas are the main causes of the climate crisis. As the IPCC have set out, for us to have even a shred of a chance of saving our future and meeting a net zero climate target, there must be no new coal and gas projects. This is the view of the conservative International Energy Agency. This is the view of the United Nations Secretary-General. And this the view of the world's scientists.

It is a moral imperative for this government to stop subsidising and approving new coal and gas. There are 116 coal and gas projects in the pipeline at the moment. Combined, they will produce 24 times the emissions that Labor's safeguard mechanism would theoretically prevent. They make a mockery of any commitment to transitioning workers and their communities.

Labor may think they can keep exporting coal and gas for decades to come, but the reality is that our international partners will stop buying it. It's time Labor was honest with the workers in coal and gas and took that transition seriously. No new coal and gas.

Marielle Smith (SA, Australian Labor Party) Share this | Link to this | Hansard source

I also rise to speak on the National Reconstruction Fund Corporation Bill 2023. The Albanese government proudly took to the election a comprehensive and ambitious plan to restore Australia's manufacturing base with the aim of seizing the economic opportunities posed by our rapidly evolving economy. We have long had a deeply proud history of manufacturing in Australia, and that proud history has been felt no more strongly than in my home state of South Australia, where automotive manufacturing drove several generations of prosperity and a growing middle-class. But after a decade of the Liberals and Nationals, manufacturing is hurting.

South Australians will never forget the former coalition cabinet minister who dared Holden to leave our state, or the Liberal defence minister who criticised the AFC, saying they couldn't build a canoe. Now is our chance to restore pride in manufacturing across this country, to transform Australian industry and to revive our ability to make world-class products at home.

This bill delivers on our government's promise at the last election to establish a $15 billion fund as part of our plan to rebuild Australia's industrial base. The NRF will provide finance—including loans, guarantees and equity—to drive investment in seven priority areas of our economy. It will target projects and investments that help Australia capture new high-value market opportunities to help our businesses grow and succeed in the economy of today and tomorrow. This includes NRF finance to grow advanced manufacturing and support businesses to innovate and move up the technological ladder.

The pandemic taught us some very important lessons. It showed us how reliant we were on overseas supply chains and the challenges of scaling up local manufacturing in times of urgent need. From PPE to the vaccines themselves, delays in sourcing these products and being able to make them locally impacted our nation's public health response. It's because of this that the government has identified medical science products as one of the seven priority areas to be given consideration for NRF investment in order to leverage Australia's world-leading research to provide essential supplies such as medical devices, personal protective equipment, medicines and vaccines.

I think the NRF is a very important step and a very important reform. I am absolutely unapologetic about our government using the levers it has as a government to deliver for the Australian people—to deliver, encourage and support local manufacturing; to deliver jobs; to deliver opportunity; to support businesses; and to scale up manufacturing. My state has always had a proud history in manufacturing, but this will help to make it better. It will provide more support and opportunities for businesses and, therefore, for those who work within businesses.

Those opposite have a choice: they can support us and join us in renewing and revitalising manufacturing or they can turn their backs on manufacturing once again. I commend this bill to the Senate.

Jonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | Link to this | Hansard source

I'm delighted to be able to make a contribution to the debate on the National Reconstruction Fund Corporation Bill 2023. I'm pleased to also follow the contribution made by the Deputy Leader of the Opposition in the Senate, Senator Cash. She made some very important points around some of the issues we have with this bill. I don't think there is a senator in this place who doesn't want to see manufacturing grow and who doesn't want to see jobs kept in Australia or brought to Australia from overseas in the manufacturing sector. The bizarre claim that anyone in this place wouldn't want those things for the people they represent I think should be called out for what it is, which is simply ridiculous.

We might have differences of opinion on how we get to a good manufacturing policy, how we bring these jobs in from overseas and keep them here and how we value-add to the products, raw materials and resources we have in this country. That's a good thing. That's what we do in this democracy. Senator Allman-Payne and I probably have some very different views on things like forestry, but we can still work through them and come to a good outcome on behalf of the people of Australia—some of whom are in the gallery today.

I will start with the fundamental issue that we in the opposition have with this bill—the fact it does ignore some of the economic situations and realities that industry faces. There are things like rising energy costs; a lack of supply of particular materials and inputs into the manufacturing process; labour market shortages; of course increased costs related to labour, which is another key input; disrupted supply chains that arise out of some of these challenges; and increased fuel costs. This bill does nothing to address those issues. Until we address those issues we are going to continually find ourselves coming up against the same challenges. They act as a stranglehold on the growth of manufacturing in this country. If the government were serious about growing this part of our economy—manufacturing—which is something we all want to happen, the government would seriously address those chokeholds, like rising energy costs and having no alternatives to the current energy generation options we have. The majority of energy in this country, as we know, is generated by coal and gas, but we have heard calls for, and some concessions made around, new coal and gas.

We need to acknowledge upfront that the government, sadly, misunderstands the problems faced by manufacturing and, therefore, hasn't properly addressed those issues. There is another example, and we have other legislation before us at the moment. I'm not seeking to debate that legislation, because that would be against the standing orders of course, President. On the one hand we have a bill before us that enables the government to distribute support for manufacturing of various kinds in specific sectors—it's taxpayers' money in effect—and on the other hand we have legislation that introduces new taxes to manufacturing in this country. I refer to—without seeking to debate it—the Safeguard Mechanism (Crediting) Amendment Bill 2022. That bill is going to drive up the cost of manufacturing because of the inability of industry to secure carbon credits to offset their emissions because they won't be able to meet the baseline emissions reductions.

So this one government in the 10 months it's been in power has decided to make it more expensive to manufacture, making it more uncompetitive for businesses in this country to be able to do what it is they do—manufacture cement, aluminium or steel, for example—and then, on the other hand, they've come in as the heroes, saying, 'We have $15 billion to drive manufacturing.' To give with one hand and take with the other, frankly, isn't going to solve the problem. It just highlights that the government doesn't understand what's happening there. And all this is happening with taxpayer's money, which is becoming something that is very much in short supply.

There are other issues I want to touch on in the time I have available to me. Senator Cash has gone through a number of issues around the process for application, how it's going to work, how long it is going to take to access support from this scheme and whether the funding model is fit for purpose given what businesses are up against. Those sorts of things Senator Cash has canvassed well. But I want to turn to the issue of forestry because that is one of those things that was marked out by the government in their election manifesto as a key industry to support. I was pleased that the now Albanese Labor government did support the forestry sector by copying our forestry policy nearly word for word. They added a couple of things. I acknowledge Senator Polley in the chamber here today, a proud Tasmanian who's always putting energy into support for sectors, perhaps not in the right way. But, as a proud Tasmanian, she will support good Tasmanian jobs. They had their policy on forestry. They also said that they were going to include forestry in the National Reconstruction Fund, which they've done, but it's all very unclear to me exactly what this bill will do. So I foreshadow that when we progress to the committee stage I will be asking questions around exactly how this legislation will work and how the program, once established, will be available to parts of the forestry industry and not others.

In particular, I want to touch on native forestry. I recognise Senator Allman-Payne has made some remarks about that. I acknowledge the difference in opinions that we will have. That's a wonderful thing that we can freely do in this country—express different views and, at the end of the day, say, 'Good day,' in the corridor outside this chamber. But only a couple weeks ago the Australian Greens issued a press release about confessions they had procured in return for support for this legislation. My colleague Senator Allman-Payne, in a joint statement with Senator Urquhart and Mr Bandt, the leader of the Greens in the other place, talked about this program and the bill not being allowed to provide support for coal gas projects or logging in native forests and that, in return for that agreement, support for the bill would be provided.

I will start by contrasting that with the statement of the Australian Forest Products Association, a very good entity. They have a slightly different view of what's in and what's out here. They talked about how value-adding in the native forest industry is still part of this legislation. I will come to my reading of the legislation in a moment. Again, as I said, I will have questions in the committee stage to interrogate this, because I want to know what is in and what is out and what certainty there is for industry around that. For what it's worth, I am a supporter of native forestry. I think it is something we should be doing more of here because we do it better than anywhere else in the world—more sustainably and to the world's best standards. People look to Australia and say, 'That's how we want to do it.' We should be very proud of that because, at the end of the day, it is better for the environment if we do it here rather than ripping forests out of the Congo basin and importing the timber here once the value-add has been done, perhaps by cheap labour in another country. We are better off doing it here, having the jobs and the environment credentials here in Australia.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Boo! That's the drug dealer's defence.

Jonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | Link to this | Hansard source

It is good to see Senator Whish-Wilson in the chamber. He has different views to me on things like forestry. But being the gentleman that I am I can acknowledge that we have different opinions and we can agree to disagree, and I will continue on with my contribution in silence, I hope.

The Prime Minister made a promise before the last election to Tasmanian forestry workers. I have a letter here, dated 17 May, from the Hon. Anthony Albanese, Leader of the Opposition, as he was then. It was addressed to workers and participants in the Tasmanian forest and forest products industry. Without reading the whole letter, he said, 'I promise you that if I become Prime Minister the government I lead will not shut down native forestry in Tasmania.' Now, I accept it is only for the state of Tasmania. It doesn't relate to the industries in Victoria or the great state of Western Australia, where, sadly, closures of that industry are occurring, which is something I lament terribly and will talk about in a very respectful way. He goes on to say: The fact that a low-carbon-emitting industry like yours, which uses a renewable resource, grown in Tasmania, is excluded from the former government's Modern Manufacturing Strategy is shameful. Adding to my commitment to you, a federal Labor government will support native forest harvesting, and Labor will assist in growing the plantation estate and increasing Tasmania's capacity in sawmilling, timber processing and pulping, including more value-adding jobs in Tasmania.' It is pretty clear that the Prime Minister was making a commitment to the people of Tasmania that native forestry was in. In fact, he uses the three words 'native forest harvesting' in a letter that talks about manufacturing and is a reference to the policy we have now.

As I said earlier, Senator Allman-Payne has secured an agreement out of the government that native forest logging is out, and that is something the Greens are very proud of. Senator Watt, the relevant minister, said in question time on Tuesday of this week, in answer to a question from Senator Sterle, that this bill 'was never about investing in coal, gas or native forests, despite the Greens patting themselves on the back for getting a win they didn't actually get'. I don't know who's right here, whether the Greens are right about having secured this agreement to have coal, gas and native forestry out or whether the government are telling the truth about it always having been out of the equation. This is when I turn to the legislation, and I look at clause 63, paragraphs (3) and (4), which talk about prohibited investments. Paragraph (3) says:

(3) An investment of a Corporation body must not:

…   …   …

(c) directly finance the logging of native forests.

Paragraph (4) defines 'native forest' to 'not include a plantation' and says:

plantation means an intensively managed stand of trees that is created by the regular placement of seedlings or seed.

I understand that, but does that mean the National Reconstruction Fund will fund the harvesting of plantation but not native? Or is it only about the value-add, which is what the minister was telling us about? It has been put to me a number of times in the chamber this week, mainly in response to disorderly interjections, President—I wasn't the one making them, I might add—

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

For once!

Jonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | Link to this | Hansard source

'For once', says Senator Polley. But the point is, is the National Reconstruction Fund funding the harvesting of plantation timber but not native? If so, on what basis? I'd love to know, and I look forward to interrogating this in the committee stage later on today or perhaps even next week. What is the science behind that? I'm sure the minister will be able to give us a very clear answer on that.

The Australian Forest Products Association have dealt with this in a briefing paper they provided a week or so back for public consumption: 'Transition to plantations is not an option. Calls to transition public native forestry into supply through plantations are unrealistic, despite plantations playing a major role in the industry. The current plantation estate is not suitable for high-quality timber products. Hardwood timber from our native forests is sustainably harvested, typically every 60 to 120 years, giving it time to develop the strength and appearance properties that consumers want.' There's a great deal more information which I will put on record in the committee stage of this bill. It's timber like the stuff we work in and around here in this chamber. It's the timber that you will see on your window frames at home, that staircases are made out of, that important parts of furniture in any house will be drawn from. It's either that, from Australian sustainably managed, world's best-standard forests or, sadly, in many cases, that ripped out of forests in very vulnerable parts of the world where there is a depressed economy that is developing and it is done with no regard for the environment at all.

Returning to my point around not understanding the issues that are pressuring manufacturing in this country, state Labor governments in Victoria and Western Australia, I lament, have policies to shut down native forestry. There are those who will have different views about this, but how can a federal Labor government say they support manufacturing, including native forest value-add, when their state counterparts in Western Australia and Victoria have a policy to shut those industries down? As a result of not supporting the harvesting and management of those forests, which is an important resource—as a Tasmanian, I'm proud of what happens in our great state in managing those forests—when the resource availability is shut down, the value-add is shut down. As a result of not supporting the harvesting and management of those forests—which are an important resource, and, as a Tasmanian, I'm proud of what happens in our great state with the management of those forests—what happens is: when you shut down the resource availability, you shut down the value-add.

We saw Parkside lured to Western Australia, with much support and many commitments from the Western Australian Labor government. Now they are shutting down. Scores of jobs in that regional community are going. Do you know where they're going? It's not somewhere else in Australia. It's offshore, because we'll still want the products that were made in that mill, but we won't be able to get them here. It's the same in Victoria. The Heyfield Mill is closing down as a result of the shutdown of the native forestry sector, which means that those jobs are going. So Labor have a lot explaining to do. I'm looking forward to the certainty that will be provided as we progress through this.

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the National Reconstruction Fund Corporation Bill 2023. I'm so proud to be part of the Albanese Labor government that is introducing a bill to restore Australian's faith that we can manufacture here in this country.

The last few years have been tough for Australia and for the world. The cost of living continues to rise. We're rebuilding in a post-COVID world. The Ukraine invasion is contributing to the global cost-of-living crisis and supply chains are stretched. We realise manufacturing has been offshore for too long, which has had deleterious consequences for the people of Australia, including our manufacturing industries.

It was very interesting to hear the contribution from my fellow Tasmanian in relation to this bill. On the one hand, yes, he wants to support native forests and the downstream processing of that timber. I, obviously, support that as well. But this is a bill, which he could support, that is going to return Australian jobs and manufacturing back to Australian shores.

This bill is about addressing those issues and driving the economy in the longer-term, particularly with the challenges we're facing at the moment. Geopolitical issues come and go and are ever-present, and climate change is enduring, but these are opportunities not hindrances. We have reached a point in history whereby we must all work together to cooperate and negotiate. This is one of those bills that those opposite should be negotiating and, ultimately, supporting.

This fund is designed to support the evolution, the reinforcement and the diversification of Australian manufacturing. Through the federal election campaign, I visited many businesses and industries across my home state of Tasmania. I was told, day after day, that the state and those businesses were desperate for the support they needed to bring back some of our industries that have left Tasmanian shores. What we need is manufacturing back on our soil, in our factories and in our workplaces. That's why we're investing in 180,000 fee-free TAFE places across the country, so we can develop those skills.

This bill and this fund are designed to help Australia to again be a country of making things. We want to back investment in Australian businesses and Australian manufacturing. For too long, we've outsourced manufacturing when, in fact, we make the best products in the world right here—products of quality that are enhanced by Australian ingenuity.

This fund will be managed independently of government. It's an independent board—expertise and a mix of investment mandate with a laser-like focus to give back to the Australian taxpayer. It will deliver for every Australian business. It will deliver for manufacturing in Australia. We want Australians and Australian businesses to have the confidence to once again invest in Australia, to purchase capital and to back in an Australian workforce to drive productivity and innovation.

I've spoken passionately in the past about climate change and the opportunities presented by a changing climate. My home state of Tasmania is 100 per cent renewable. We are world leaders in renewable energy. So $3 billion within the fund will be dedicated to renewables investment. Three billion dollars out of the $15 billion National Reconstruction Fund displays a commitment to renewables jobs and a commitment to reduce emissions to meet the targets the parliament supported for 2030, and net zero. It's a commitment to companies like Lion Energy and the Bell Bay Advanced Manufacturing Zone—very, very important to the Tasmanian economy. There is green hydrogen and solar, and exciting areas for renewables such as in education, investment and innovation in Australia, which is already manufacturing some of the best solar panels in the world. Australia can be the renewables superpower, and we can compete with Europe and Asia in the renewables space. It isn't too late.

We've had nine years, nine very long years, of neglect by those opposite. It was on their watch that manufacturing left Australian shores. They never invested in Australian skills. So, when Holden closed, all that experience of those skilled workers that had year after year of expertise just disappeared. We know the previous Liberal government and Liberal state governments neglected the TAFE sector. They did nothing to bring our universities together with TAFE to ensure that Australians were skilled for the jobs of the future, because they don't believe in anything. We've seen clearly, over the last 10 months, that they're really the 'no-alition', because they say no to everything. We've got a fund that they should be supporting, but again we will see, when this goes to the final vote, that they will vote against it. They're voting against Australian jobs. They're voting against Australian skills. They're voting against the wishes of the Australian people, who gave us a mandate. We went to the election with this, and those opposite are going to vote against it.

Australia can, as I said, compete with Europe and Asia. It's about supporting the manufacture of some of those new energy technologies that come with low or zero emissions, and we can scale up onshore, not offshore. Australia has always been a manufacturing country, and we can be that country again. We can make things here. We can make good-quality things. We should be supporting the industries of the future to make sure that those jobs come back to Australia.

I can vividly remember, many years ago now, when those opposite let Holden close its doors here in Australia. It was a sad day not just for car enthusiasts; it was a sad day because we saw those jobs going offshore and those skills being lost from manufacturing in this country. But we as a government are supporting and we will invest in businesses, in renewable energy and in new technologies to make sure those manufacturing jobs come back to our shores. We need it in my home state of Tasmania. We need it right across this great country of ours.

A renewables future is what the world is about. We need to take advantage of that. We need to back in manufacturing. We need to back in Australian jobs. We need to back this in because it's not only good for our economy but also essential to the social fabric of our communities to have Australians working. Let's advance. Let's support. Let those opposite and around the chamber think for a moment about what this will mean for our economy and for the Australian people. So I'm asking you, I'm urging you, to support this legislation and back in advanced manufacturing in this country. To those who are destined to vote against this bill, I want you to reflect on that while you still have the opportunity—what this is going to mean for our country.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

Senator Polley—through you, President—I will be reflecting on the fact that, between 1997 and 2012, billions of Australian taxpayer dollars went to supporting the automotive industry. How much do you think was spent between 1997 and 2012 in Australian taxpayer dollars? To everyone in the gallery, to everyone paying tax, to everyone listening: how much do you think was spent not in today's dollars but in 1997 to 2012? Five billion? No. Ten billion? No. Fifteen billion? No. Twenty billion? No. Twenty-five billion? No. Thirty billion dollars of taxpayer dollars was spent supporting the automotive industry. And what happened? It left anyway. Thirty billion dollars was spent. And now we have a new policy coming from those opposite, industry policy 2.0, proposing exactly the same thing.

Senator Tim Ayres says it's a disgrace. Do you know how much was spent in taxpayer dollars to subsidise those 40,000 jobs each year? It was $300,000 of taxpayer dollars that was spent per job, to subsidise each of those jobs. Does that make sense to anyone in the gallery? Does it make sense to anyone listening to this debate—$300,000 of taxpayer dollars to subsidise those 40,000 jobs. What happened at the end? They went anyway. Now the government is proposing a policy which will take us back into that territory. Those aren't my figures. If you want to learn about the issues in relation to this debate, have a look at the Bills digestnot prepared by a politician but prepared by our wonderful parliamentary staff, who go through these issues. We spent $30 billion on the automotive industry, and they couldn't get it to work. Now we're going down exactly the same path as we did in the past.

Honourable senators interjecting—

Senators might want to restrain their remarks whilst I make this comment—I'm happy for you to continue after I make this comment: I would like to acknowledge former senator Kimberley Kitching in terms of her role in relation to the consideration of manufacturing policy. In the last parliament I served as chair of the economics committee, and former senator Kimberley Kitching, a Labor senator from Victoria, participated in that committee and demonstrated a great deal of passion and empathy for the cause of those opposite, which I respect but deeply disagree with. I'd just like to note her contribution in relation to this debate.

There are so many myths in this debate. We heard from Senator Polley that the previous government apparently did nothing to support the manufacturing industry. What are the actual realities in terms of that? What's actually the truth in terms of the support of the previous government? You don't have to ask me; again, you can go to the Bills digest for the objective information in relation to this. I quote from page 12 of the Bills digest:

The Commission estimated that the manufacturing industry had received more than $2.8 billion in net industry assistance from government in 2020-21—

That was under the previous government—$2.8 billion in one year. Those opposite say, 'You did nothing.' That $2.8 billion is not my money or Senator Ayres's money; it's the people's money. And they want to increase that amount from $2.8 billion to $15 billion. That's their answer. Don't bring this farcical argument that those on this side of the chamber don't care about the manufacturing industry; it's totally a fallacious argument, and totally wrong. We are concerned about how we get to the position to provide the maximum opportunity for people to have productive, efficient manufacturing industries in this country, as opposed to this sort of nonsensical industry policy.

First, I want to talk about approach. The core business of government should be about creating the investment environment for manufacturing and every other industry. That is the core function of government. It is not to take shareholdings in different businesses and become an owner of those private enterprises. I don't think anyone here or any of the 15 million Australian taxpayers signed up to contribute $1,000 each for the Labor Party's private equity fund. That's essentially what they're proposing. It's not your choice. They're going to invest your money in individual enterprises all over Australia. Gee, what could go wrong? The Australian automotive industry received $30 billion between 1997 and 2012—$30 billion!—for no result.

The other point I want to make has been made by the Productivity Commission. You will not hear anyone on the other side of the chamber talk about the Productivity Commission. Why? Because the Productivity Commission have repeatedly warned Australia about going down this path. That's because it does not work. It distorts the economy. It promotes rent-seeking and the misallocation of resources. There will be a conga line of rent-seekers coming after the $15 billion from the government with respect to their projects. You've got to ask yourself this question—and it's in the Bills Digest

Sorry, Madam President; I'm having trouble hearing myself over Senator Ayres's constant interjections. If they were witty, I might give him more indulgence. But it is hard to hear.

Sue Lines (President) Share this | Link to this | Hansard source

Yes, I will remind senators that they need to listen in respectful silence. Of course, it is open to any senator who wishes to make a contribution to add their name to the list.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

Thank you. I'm sure Senator Ayres will. I want to refer to the report I did, as deputy chair of the Economics References Committee, which looked at this, and ask two simple questions. What we've got here is the government proposing to invest your money, as taxpayers, in manufacturing enterprises all over Australia. Right? That's the proposition. It will be done either directly by becoming joint owners or by lending them money. That's the proposition they're putting forward for this $15 billion. I have two simple questions. Why can't the particular venture attract equity investment or debt support without going to the government? If someone's got a good commercial idea and they think they're going to generate a rate of return, generate profits—the flow of dividends—why can't they go and raise the money from private investors? What's the issue? Why can't they go and raise the money from the bank, if they've got a good idea? Maybe it's that they can't get the funds from somewhere else because it's just not a good idea. The government is actually going to fund them. Next time you come to Parliament House, Madam President, you'll see a queue of rent-seekers down Kings Avenue who are coming up to this place to seek equity capital and loans from the government to fund their projects. We're all going to become shareholders. We're all going to be thrown into this swamp. That's what's going to happen under this scheme. So the question is: if the private sector will not invest its equity in a venture and commercial lenders will not advance sufficient debt funds, why should the government risk taxpayers' money—your money? It's not my money; it's your money—$15 billion.

At the same time, think about how else that money could be spent, Madam President. You won't hear those opposite talking about that. That's called opportunity cost, the scarcity of resources. These are basic economic principles. You will not hear those opposite talk about them. How else could that $15 billion be spent? Maybe it could be spent in improving our road infrastructure, in improving health services or in adding drugs to the PBS for people who need those life-saving drugs. Maybe it could be spent in doing the things that should be the core business of government. That's the opportunity cost. Every single one of the dollars that are spent on this utopian dream is a dollar that can't be spent somewhere else. That's opportunity cost. You will not hear those opposite refer to that.

Could I just say, Madam President, that I come to this place with 25 years experience in the private sector. I have dealt with state owned enterprises on four continents. I was involved in one example where a state owned enterprise lost US$1.2 billion in relation to an investment. Do you know what? When you engage in these investments you don't always make a profit; you can make a loss. The problem is that when the government is the shareholder there's a blurring of the line between the commercial and the political. This has been well substantiated.

I want to give you a quote from a book I often quote from, Basic Economics. Let me quote from this book. These aren't my words. Page 492 says:

Where there are elected governments, their officials must be concerned about re-elected—

Does that make sense?

which is to say that mistakes cannot be admitted and reversed as readily as they must be by a private business operating in a competitive market—

Does that make sense to you?

in order for the business to survive financially. No one likes to admit being mistaken but, under the incentives and constraints of profit and loss, there is often no choice but to reverse course before financial losses threaten bankruptcy. In politics, however, the costs of the government's mistakes are often paid by the taxpayers, while the costs of admitting mistakes are paid by elected officials.

That is the blurring between the lines of politics and the commercial.

Senator Ayres, you will have your opportunity. I know I'm getting under your skin because my rebuttal of your utopian notion doesn't suit you. President, you might ask Senator Ayres to just cool down a bit.

That's basic economics. Let me give you an example. There is something called the Concorde fallacy. What's the Concorde fallacy? It's actually named after the Concorde. We all remember the supersonic jet. The Concorde was considered this great idea between the UK government owned enterprises and French owned enterprises. They wanted to invest in supersonic technology. They wanted to be ahead of the game. They wanted to provide manufacturing jobs. So they got together, they did the research and development, and they built the Concorde. And what happened? It was a commercial and financial disaster. The budget was blown, the project timetable was blown, and the Concorde doesn't fly anymore. But the reason they call it the Concorde fallacy is—this is the position those opposite in government are going to put all of us in as taxpayers—the UK and French governments of the day were unable, from a political perspective, to say: 'Draw a line under it. We won't put any more taxpayer dollars into it. It hasn't worked.' It's a fallacy to think that it makes sense to put an extra dollar of capital into it when you've invested billions of dollars of capital. You have to ignore the billions of dollars of capital you've invested and look at whether it makes commercial sense to invest that additional dollar of capital. That's the Concorde fallacy—billions and billions and billions of dollars of taxpayer funds were wasted under that fallacy.

This is the reality. They don't like to hear it, but again I come back to that fundamental question. If these companies can't raise the money from private investors, there might be a reason. Typically, people who analyse investment opportunities will invest in an opportunity that makes sense. But they want to invest your money in relation to these private ventures. What's going to happen when it goes pear shaped? What's going to happen after the Australian government has invested and becomes a minority shareholder in, say, a manufacturing enterprise which has 500 workers and is making a loss? We know what's going to happen—

Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

And it's in a marginal seat.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

And it's in a marginal seat, as Senator Brockman says. Politics: 'We can't shut that business down. We've got to put in more capital. We've got to put more of your money into that business. We can't let those jobs go.' We've gone down this path before. Governments all over the world have gone down this path. It does not work.

The focus of government should be basically a focus on the investment environment. There are plenty of things we can do to make this country more productive and more attractive for capital investment in the manufacturing industry, and that's what we should be doing, not investing taxpayer dollars in the way proposed.

Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

We certainly have gone down this road before, Senator Scarr. Rather than listen to you, I've just spent the last 10 minutes on Google looking at the amount of money your government put into investing in private industry, so let us start with that, shall we? Two billion dollars announced under the Morrison government for the new energy economy, for critical loan facilities and for a whole range of things, like public-private partnerships in infrastructure. There was $500 million directly for carbon capture and storage technology. There was another billion dollars directly to assist private industry to fund low-emissions technology funds, the Clean Energy Finance Corporation, the Australian Renewable Energy Agency and the Medical Research Future Fund. They're just some of the schemes under the previous government. Obviously Senator Scarr has made a loud contribution in here, but he's not loud enough within the Liberal party room.

This is accepted practice, for governments to invest in emerging industries. The simple reason is risk-reward ratios. This is why the Greens, back with the Labor Party in 2013, negotiated $10 billion to the Clean Energy Finance Corporation to invest in clean energies, which has been very successful; and $2 billion to the Australian Renewable Energy Agency, which has also been very successful. We've seen the CSIRO over many years using public money to invest in high-risk, high-reward technologies like the wi-fi we're all using in here on our phones. That came from government leadership in investment. The list goes on. This is a very common thing, and the Greens are proud to support a fund of $15 billion that will keep manufacturing in Australia and re-establish sovereignty in our manufacturing. I'd like to recognise the work that my colleague Senator Penny Allman-Payne has done in regard to this bill today and for her negotiations in getting outcomes on this bill, specifically to wreck funding into fossil fuel projects and into the forestry sector. We do support funding into renewable energy.

As I said, the Greens have a very proud legacy, shall I say, working with the Labor Party just over 10 years ago to establish what I think was a revolution at the time in investing in driving the renewable energy revolution. We don't hear a lot in this chamber, especially in recent weeks with the debate going into the safeguard mechanism, about the fantastic work we did with the Gillard government. We tend to go back a few years, to the Rudd government, and talk about the CPRS. Personally, I'm not sure why the Labor Party continue to write Julia Gillard out of the history books, because she was able to negotiate the clean energy package, which was the gold standard for renewable energy action and driving low emissions right around the world. I was here when that was in the parliament. Obviously it was a sad day to see the Liberals dancing the ring o' rosy when they managed to remove the carbon price and some of the key elements of that package. I do want to acknowledge Julia Gillard for negotiating with the Greens and delivering such fantastic outcomes, which are still with us today and still driving lower emissions around the country, creating jobs, supporting research and development and supporting innovation.

There are a couple of things I would also like to address before I get to my substantive contribution. Senator Polley mentioned that she's proud to see the government investing in retaining manufacturing in Australia. I was here to witness the whole myriad of trade deals that the Liberal Party signed where we did sell our domestic industries down the river, like our car industry. Who can forget the very famous cows-for-cars trade deal with the Korean government, not to mention the Japanese free trade deal negotiations around what was previously the Trans-Pacific Partnership Agreement and the RCEP agreement. We do need to retain sovereignty.

I note that during COVID this issue became very critical. I remember being in this chamber in the early days of 2020 when the proverbial was hitting the fan and we were coming back here to pass stimulus packages and to try keep everything on track. It became really obvious to us that, in areas like medical technology and medical innovation in terms of dealing with this virus, we just didn't have the capabilities and the capacity in this country to even look after ourselves. We were desperately relying on overseas planes arriving from other countries to deliver simple things such as PPE gear. It was clear something was wrong with this country when we didn't have the ability to manufacture and deliver these things ourselves.

I would like to recognise previous senator Rex Patrick: he always used to say there was only one place left in this country that manufactured toilet paper during the COVID crisis, and that was Kimberly-Clark in South Australia, which, through various strange twists of fate, we managed to keep operating in Australia even after relentless pressure to shut it down and move operations overseas. So we at least had one—one manufacturing place in this country that could make toilet paper when we so urgently needed it during COVID. It's really important to reinvest back into sovereignty of Australian manufacturing, not just to create local jobs, new innovation and technology and new industries but also because it's actually part of our national security. It's part of our sovereignty that we need to pay heed to.

I would also like to address Senator Duniam's comments around forestry. We in the Greens have come to expect that from the Liberal Party. And it's very interesting to contrast Senator Duniam's contribution to Senator Scarr's, which was saying the government should invest directly in private businesses. Senator Duniam was in here defending the forestry industry. We have literally put in billions of dollars of public money to underwrite this industry over the years—billions and billions of dollars in both direct and indirect subsidies to keep what are largely small commercial operators functioning.

There's nothing more important in our fight against climate change than protecting our native forests. Yes, we need to plant more trees, we need to regenerate denuded areas and we need to re-wild areas, but protecting our old-growth forests is absolutely critical. They are our first line of defence in our climate emergency. Tasmania has some of the most carbon rich forests on the planet. This has been proven beyond a doubt in places like the Tarkine and Tasmania's south-west World Heritage areas. These forests are essential to sequester carbon. It's no secret—the facts are out there for anyone who wants to check it.

If you look at the Tasmanian government, yes, we're 100 per cent renewables, but why do we only just break net zero? Why are we are struggling if we're 100 per cent renewable in our power generation? Because Tasmania's native forest industry is a massive emitter under our carbon accounting. It is a very significant national emitter, so stopping native forest logging would actually be a very smart thing to do, when we're looking at where we can reduce our emissions and meet our carbon budgets with the restraints we have on them going forward.

It's an absolute no-brainer to protect our native forests. They are our first line of defence in our climate emergency. While I'm on my feet in the Senate, I would really like to pay tribute to some of the groups that have tirelessly campaigned to save these native forests: the Tree Projects guys down in Tasmania, who I was just with on Saturday last week; GRANT, the Grassroots Action Network Tasmania; the Wilderness Society Tasmania; the Bob Brown Foundation; and a whole bunch of other tireless activists, who are protecting these forests not just for their biodiversity value and their value to local community but also because they know we need them to fight climate change. The drier they get and the more we see storms where we get dry lightning, the higher risk they are at.

While logging is still, unfortunately, alive and well in Tasmania—actually, I will take that back, President; it's alive but it's certainly not well, because it's not a good thing to be logging native forests—logging is not the number one threat to our wild areas and our beautiful Gondwana Rainforests. Climate change is the biggest threat to these forests. We need to do everything we can to protect them.

I want to make what I feel like is a significant point in contribution to this debate today, and that's around the circular economy. I will recognise the previous Liberal government took steps, through the waste reduction and recycling reforms we saw in the last parliament, towards building a circular economy, and I'd also like to recognise that the current Labor government are taking the next steps towards building a circular economy. We now have a circular-economy task force, appointed by Minister Plibersek, and I hope we're going to use the current framework in our country to start mandating product stewardship schemes so that we actually get action on things like recycling of plastics and other waste. But building a circular economy requires a whole-of-government approach. In areas like the priority areas that have been highlighted in this fund, like critical minerals and a whole range of other things, we need to take a circular-economy approach to these investments.

I went and had a look at some of the submissions on this bill—for example, submissions from the Australian Council of Recycling. Obviously they commended the Australian government's priority of establishing this fund, but they brought to the attention of the government that they're an industry that needs this investment, and they urge the government to invest in circular-economy principles or invest in industries that could deliver on the circular economy and areas like advanced recycling technologies, which should be included under this fund.

I think we all agree that this is an absolutely critical area that all Australians, no matter their political colour, agree on. We need to reduce waste. We need to build an economy where everything stays in our economy. That's the definition of a circular economy: everything's designed for its end of life; nothing is wasted. It's a zero-waste economy. That way we get to reduce inputs and we get to move to net zero emissions more quickly, because it's taking really important climate action, and we get to invest in Australian industry and keep that expertise here.

Recycling modernisation funds were set up under the previous government that are still able to be accessed by the industry. They will be separate to the kinds of investments we're going to see under this fund. Sadly, there hasn't been a big uptake of those recycling modernisation funds. That's because the recycling industry doesn't want to spend the money, even if it's co-investing with government. They don't want to spend money in this industry, because they don't have confidence that we have the legal framework set up. They know that if you don't mandate, for example, packaging targets to use recycled content—so that when you go into the supermarket 60 per cent or 50 per cent of all the packaging that you see in the supermarket has come from recycled content in Australia—then it wont' happen. Until we get those mandated in laws, they won't have that confidence even to invest in the kinds of funds we've seen today.

We've also seen submissions from the Australian Academy of Technological Sciences and Engineering, ATSE, who talk about the need to establish circular economies and urge the government to invest in projects that facilitate the establishment of a circular economy for renewable energy products.

In the remaining minute I have left for my contribution, I would like to move my second reading amendment to the National Reconstruction Fund Corporation Bill 2023:

At the end of the motion, add ", but the Senate:

(a) is of the opinion that:

(i) building a circular economy is a central element of delivering net-zero emissions,

(ii) a circular economy can bolster Australia's capabilities and reduce supply chain vulnerabilities, and

(iii) the benefits of a circular economy could add $210 billion in GDP by 2047-48, creating an additional 17,000 full-time equivalent jobs; and

(b) calls on the Government to:

(i) invest in projects that facilitate the establishment of a circular economy for renewable energy and other products,

(ii) explicitly incorporate circular economy principles into the seven National Reconstruction Fund priority areas; and

(iii) ensure that the National Reconstruction Fund Board gives regard to outcomes and advice from the Circular Economy Taskforce".

I imagine it wouldn't be controversial, certainly not for the Labor government, to support this. It's very broad. It's in line with what they're delivering in other areas. The Liberal Party of course should support this, because they've taken the first steps on the road to a circular economy. But they'll probably oppose it, because they're opposing everything. Somehow, now that they're in opposition, everything gets opposed. But it would be good to see the Senate come together and vote on something that—it's not binding on the government, but it is symbolic—sends a really important message that we're all on the same page now in trying to establish a circular economy and a zero-waste economy in this country.

Nita Green (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to rise today as a proud member of the Albanese government in this chamber to speak about our government's plan to bring manufacturing back home and back to many regions, like the region I live in—regional Queensland. Before I go through the National Reconstruction Fund Corporation Bill 2023, the fund that the bill will establish and how the fund will support manufacturing workers, I want to address some of the comments that have been made in this debate.

I apologise to Queensland manufacturing workers who are watching this debate for the words that were used in describing their contribution to our state. I certainly do not agree with the Liberal senator who called manufacturing workers rent-seekers. I don't think manufacturing workers in Maryborough who build our trains are rent-seekers. I don't think the manufacturing workers in Cairns who maintain, build and repair our naval ships are rent-seekers. I don't think our sugar workers, whether in Mossman, Gordonvale or Mackay, who produce the sugar that we send overseas and eat ourselves are rent-seekers. I certainly don't think the men and women in defence manufacturing at Rheinmetall in Brisbane are rent-seekers.

It was an appalling slur against good men and women who simply seek to have a good, secure local job—and many of them are in regional Queensland. It's not a new concept to Queenslanders that the LNP doesn't support manufacturing or manufacturing workers. I know that those words will really cut home. I seek to distance myself from those statements and make it clear that we on this side of the chamber value the work that manufacturing workers do. We want to create more manufacturing jobs in this country, and that's what this bill seeks to do.

Labor's National Reconstruction Fund will invest $15 billion in rebuilding Australia's manufacturing industry. The fund will revitalise Australian industry after a decade of coalition neglect and the extraordinary pressure industry experienced earlier in the pandemic. It will provide loans, equity investment and guarantees for seven strategic investment areas for our long-term security and prosperity. It will provide finance for projects that add value, improve productivity and support transformation, rather than enabling expansion of business as usual.

Our bill will ensure that significant investment is above politics, with the fund being administered by an independent board that will assess the projects at arms-length from government. It will be staffed by industry and finance experts, who will ensure that the most up-to-date, clear advice is available and utilised at all times. What's better is that we expect a positive rate of return.

It will be a desperately needed boost for those seven priority industry areas. We are looking to value-add in resources because we are a country rich in minerals and it is only right that we transform them into valuable products right here in our country. We shouldn't be mining critical minerals just to ship them overseas, for profits to be made by other countries and other workers and for jobs to be created elsewhere. We want those jobs right here in Australia. We have the skills and we need to do it right here.

We are investing in value-adding in the agriculture, forestry and fishery sectors as well. The last few years have shown just how important food security is for our country. The last few years have also shown us what kinds of challenges we need to be ready for. That's why one of the areas we are prioritising is investing in medical science.

We are making up for lost time, after 10 years of climate inaction and denial, by making renewables a priority investment area. We are also bolstering our strategic workforce skills advantages by prioritising our defence capability. Some defence manufacturing is happening in my home state of Queensland. We're underwriting all of this potential by investing in enabling capabilities like quantum robotics and AI. It's a really exciting prospect that all of these different areas of investment will be prioritised by this government and by this fund so that we can get these ideas off the ground and we can be ahead of the times when it comes to investing in advanced manufacturing.

Most excitingly, we have a government that is finally backing Australian workers, industry and communities by including transport manufacturing in the seven priority areas. I'm particularly excited about this investment because, in my home state of Queensland, we've proven what comes from investing in manufacturing and investing in regional communities. It was a state Labor and government who brought rail manufacturing back home to Maryborough and the workers in that region, who make up a third of the existing manufacturing workforce who benefit from decisions like these. These are the workers that these decisions matter to.

Maryborough, as a thriving industrial town, has rail facilities that employ hundreds of workers. There is long-term certainty, because we know that big projects like rail or defence or resources are long-term projects. That means that families can make a life in regional Queensland because workers know they have a long-term, secure job. These projects drive growth up and down the supply chain, creating jobs in small and medium enterprises. This investment isn't just about the job on the manufacturing floor; it's about the childcare centre, the cafe, the teacher, the person working in the local school—all supported by a rich history of manufacturing jobs in a regional town like Maryborough. It's a story that shows how investing in manufacturing can transform communities, states and, hopefully soon, the nation.

Since the change of government, support for regional manufacturing is back on the agenda. The Albanese Labor government took to the election a plan to rebuild Australian manufacturing and the jobs that come with it. Since coming to government, I've had the opportunity to visit dozens of manufacturing sites across regional Queensland—something that I've continued to do since being elected. I'm always interested to find out the types of things that we make in regional Queensland and what we could be making more of if we just got the chance to do so. Last week I visited a local window and door manufacturer in Cairns. Some of the staff have worked there for over 20 years. I really shouldn't be surprised by the length of their service, because manufacturing jobs are secure jobs. Secure jobs mean that families can build a life in regional towns, and that means regional towns can build a prosperous future. It means that young people in the regions can build a life for themselves without having to move too far from home, which is something I know is important to parents in regional communities as well.

Regional Queensland can and should be a manufacturing powerhouse. We already make trains in Maryborough, which was a blueprint for the prosperity that this government's support for manufacturing can deliver. Now our National Reconstruction Fund promises to unlock more opportunities in more regional towns. We should be making more things in Cairns, in Townsville, in Rockhampton and in Bundaberg as well. Not only does it mean good local jobs and industry; it also contributes to our economy being more robust and complex. Regional manufacturing jobs don't just benefit the towns where they are based; they benefit the whole community.

Already, as a Labor government, we are investing in projects like the Cairns Marine Precinct, a $300 million investment into the marine precinct there to maintain and build and repair ships for our naval fleet. I announced this alongside Minister Catherine King a few months ago and am very pleased to continue to visit the shipyards there in Cairns to see the work progressing. We are investing in the Townsville Hydrogen Hub, which will ensure that regional Queensland is a centrepiece of our path to become a renewable energy superpower. We're also backing the cutting-edge research, development and training facility in Townsville referred to as NQ Spark.

All across Queensland, Labor is investing in regional workforce, infrastructure and ingenuity to rebuild Australian manufacturing and industry. The National Reconstruction Fund will supercharge all of these investments. Make no mistake: this is a very good-news story. It's a good-news story for manufacturing and businesses, it's a good-news story for regional Queensland, and it's a good-news story for regional families. It's a story that makes the decision by those opposite to vote against the bill all that more disappointing. Every day in this place it seems like LNP senators are standing up to talk about how they're the party for the regions and yet, without a second thought, they threw up their hands and said no to the biggest peacetime investment in Australian history, one that will create jobs in regional Queensland. When we consider the state that those opposite left our manufacturing industry in, it becomes clear that maybe their opposition is more than just sheepish, that it's a little bit of embarrassment. They weren't up to the job of securing our supply chains when they were in government, they weren't up to the job of growing heavy industry and they weren't up to the job of creating good secure jobs in our regions.

It's no secret that manufacturing in Australia has declined steadily over the past decade under the Liberals and Nationals. It's an absolute disgrace that, at the time of the last election, Australia was ranked at the very bottom of the OECD list of self-sufficiency ratings in manufacturing. Industry provides economic sovereignty and security, and Australia ranked dead last in those ratings. Manufacturing grows regional economies and secures long-term jobs, and yet we continued to slide down the scale. Our manufacturing sector makes up only seven per cent of our gross domestic product. But it isn't just a set of statistics and economic indicators; we lived this through the pandemic and we saw the impact of not being able to manufacture things right here in Australia.

We know that during the pandemic healthcare workers were making their own PPE because we didn't have enough. For a time, supermarket shelves were empty and we were at the mercy of more self-sufficient countries in accessing vaccine supplies, because our capacity to manufacture vaccines ourselves was incredibly limited, and our much-needed summer break was ruined because we were relying on scarce imported RATs. But the truth is that everyone saw this coming, particularly the manufacturing workers who had been belling the cat for years. Apparently, everyone knew, except for the former government, that we didn't make enough things here. Successive Liberal-National governments pushed the car industry out of Australia. They slashed R&D support, stifling innovation, and they cut funding for apprentices and trainees, which dried up the skills pool we needed to create more jobs and to make more things here. That's the legacy of those opposite when it comes to manufacturing. It's a legacy that they're standing by today when they choose to vote against this bill.

Let's be clear about this bill and this policy. It's good policy. It's not only good policy but its outcomes will create a design to make sure that, unlike so many programs under the previous government, the National Reconstruction Fund will make investment decisions free from political interference. There will be no colour-coded spreadsheets, no secret industry minister and no rorts like we saw in the sports and car park funding. Australians can be assured that we have designed this policy to be governed with integrity. This policy will be administered by an independent board and will make decisions based on expert industry and financial advice. And it is expected to deliver a return on investment. This is good policy, and it's about those good people who are manufacturing workers in our country. I've had the real privilege, not only to meet many of them but to understand what drives them.

I'll say today, in this Senate, that this is a policy and a commitment to support manufacturing workers. I know that the debate will go down many channels and that there'll be many excuses from those opposite. But, on this side of the chamber, and through this policy, we support manufacturing workers. The people who vote against this policy don't support manufacturing workers. It's black-and-white: we support manufacturing in regional Queensland, and I encourage other senators to do the same. I say to those manufacturing workers in regional Queensland: whether you work in sugar, train manufacturing or marine manufacturing, thank you for the work that you do. I'm so proud to represent you and to deliver this policy for you today.

Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source

First of all, I'd just like to defend my good friend and colleague here Senator Scarr against those outrageous slurs by the prior speaker, who seemed to think that he was calling people who work in manufacturing rent seekers. That was completely outrageous, and it's typical of what we have come to expect from the other side, who deal in feelings and fear rather than facts.

For a Queensland Labor senator to come in here and say that she supports manufacturing in the regions is an outrageous statement, because it was the Queensland Labor party who sold the Port of Brisbane and sold Queensland Rail. Queensland Rail was built by Joh Bjelke-Petersen, who opened up the Bowen Basin which actually built the railway lines that provided the freight, provided the royalties and provided the demurrage charges at the ports. That recurring revenue, built by the National Party in the 1970s and 1980s, provided the money to fund schools and hospitals—hospitals like a maternity ward in my home town of Chinchilla that had four maternity nurses in the seventies and eighties, when I grew up there. Under a Labor government, we don't have a maternity ward there in Chinchilla or Biloela or many other towns, including Gladstone. And you know why? Because the Queensland Labor government has driven Queensland broke. And you know how they did it? They flogged off all of our infrastructure built by the Liberal-National government of the seventies and eighties that provided the revenue to pay for the recurring expenses and provided jobs in the regions. It wasn't just the Bowen Basin that was opened up. There was the Weipa bauxite deposits. There was value-add going on at Gladstone that created jobs there. We built lots of dams—the mighty Burdekin dam up north and the mighty Wivenhoe Dam. That paid for things like the Captain Cook express in Brisbane to provide valuable infrastructure.

But it wasn't just the Queensland state Labor government that destroyed manufacturing in that state and this country; it was the federal Labor government—in particular, the Hawke-Keating government and their reckless neoliberal policies of the eighties, particularly when Paul Keating opened up our capital markets to the world in the 1980s. In 1985 we had $8 billion in foreign debt. The banks had borrowed $8 billion in foreign debt. By 2008 we had $800 billion. The banks had borrowed $800 billion in foreign debt. Nearly all of that money went into inflating house prices in Sydney or Melbourne so that the average house price in Australia had risen from four times earnings to approximately, depending on which city you lived in, between 10 and 12 times earnings.

The reason why that matters and why capital controls matter is that you need to dictate how money that is borrowed is invested. The banks were allowed to pump so much money into residential housing, and all that did was inflate the price of housing. It didn't add to productivity. It increased demand, but it didn't increase supply. So now we've got this situation in Australia where we're drowning in debt because we've overinvested in consumption—and, yes, houses are important, but a house is the same house whether it's valued at half a million dollars or $5 million. Because Paul Keating went on this reckless neoliberal ideological spend, we have allowed the foreign banks to drown us in debt, not to mention withholding taxes, which I'll come to in a minute.

Not only that but we then had the Button plan, which rationalised and did a lot of things that made it very difficult for Australian industry, particularly the car industry, to compete in international markets. Now, no-one is for a minute suggesting that we didn't need to reform the industry. But we didn't need to actually destroy the entire car industry. I'm not going to say either party is blameless in any of this, but, when the Labor Party come in here and say that we shut down car manufacturing, that's not true. Nissan and Ford shut down under the Rudd-Gillard government—during those years. So we need to get that into context.

Not only that but other policies—things like superannuation. When Senator Scarr talks about rent seekers, he is talking about industries like superannuation that didn't exist 30 years ago. We have got tens and tens of thousands of financial engineers in this country that do nothing but shuffle paper and pocket fees. They do not create one asset. I well remember Bob Hawke going out there and saying how compulsory superannuation was going to build infrastructure in this country. That was a completely outrageous lie. Superannuation does not build infrastructure; it buys infrastructure. That is a very significant difference.

These superannuation funds sit there every week. They don't have to do a thing. They get 12 per cent—soon to be 12 per cent—of the entire workforce's wage, and they don't have to do anything. This is money for jam. They just pay over the market for existing infrastructure assets, and if they have too much money—which they do now—they don't actually invest here in Australia. They've gone and parked $1 trillion of superannuation offshore. One of the Queensland public super funds is the biggest shareholder in Heathrow Airport in London. Why have we got Australian superannuation funds investing in offshore infrastructure instead of building new infrastructure here? If we want to get manufacturing back on its feet in this country, we need to go back to the past and look at the way it was done in the past.

Let me say this: infrastructure is a monopoly. I believe in the private sector, but I don't believe in free markets, and I speak with a great deal of authority when I say that. No greater person than Robert Menzies, the founder of the Liberal Party, actually said, in the last paragraph of the 'Forgotten people' speech, 'We should not go back to the old and selfish notions of laissez faire.' That's very important. I am on this side of the chamber because I believe in capitalism, and that is people risking their own capital. I don't care whether you're a teacher, a nurse, a doctor, a lawyer, an engineer, a bricklayer, a mechanic or a carpenter; if you get out of bed every day and put your nose to the grindstone, you are a capitalist in my book. You are the one risking capital. That's how markets work. They have to rely on the risk/reward paradigm. That is why, when it comes to monopolistic infrastructure, I believe that governments should build and own it, and that is why I'm against this fund.

This fund is going to channel $15 billion to—as my good friend and colleague Senator Scarr rightly says—the rent-seeking parasites. The fact of the matter is that small businesses, like window manufacturers up in Cairns, won't know how to go through all the applications and the paperwork and jump all the hurdles to get the hand-out. This is the thing: guys who work in manufacturing, the guys who are on the tools, can't stand the paperwork. What you will have is the professional class of rent-seeking elites, who know how to work the system—a lot of them will be ex-staffers and lobbyists, who do nothing but grease the wheels, sucking money out of the system. By the way, I don't disagree with Senator Whish-Wilson; I never agreed with a lot of the slush funds we set up, either. Either you own it and you build it, operate it and are accountable for it, or you let the market deal with it, provided that the people who participate in the market are risking their own capital. That is why I hate superannuation. You've got a whole industry out there gambling with other people's money, and that's not right. I should add that most corporations, large corporations especially, aren't capitalists either; they're socialists. The executives who run those corporations get paid millions of dollars, and when they drive those companies into the ground—or, God forbid, sell an asset off to a foreigner—they collect their billions of dollars in bonuses. They don't care about jobs here in Australia.

I'm not going to sit here and whinge for the whole 15 minutes. I know I've done a fair bit of whingeing already, so I will move forward on how we get manufacturing back in this country. If we want to rebuild manufacturing in this country, first and foremost we need cheap and efficient base-load energy. I notice that Senator Green didn't once mention the coal workers or the gas workers. What stinks about this so-called reconstruction fund is that the coalmines, the gas mines and the pipelines to pump gas around the country—these are things that give us a natural advantage in this country—are excluded from this fund. If we're really serious about getting manufacturing back on its feet in this country, we need cheap, reliable energy. There's 400 million tonnes of coal out there near my home town of Chinchilla, sitting on the ground, which is owned by the people of Queensland. It is free, except for the cost of production, and it is very cheap to produce. It is right at the ground level. The power station is known as a mine-mouth power station—the coalmine is right next to the power station. The power station sits next to the southern interconnector, which sends electricity to New South Wales and Victoria. It is the cheapest energy in Australia, as per the Finkel report in 2017.

We could put up a couple of turbines there. We could put up a nuclear power station to the north of Chinchilla, just outside of Chinchilla in Barakula State Forest, the biggest state forest in the Southern Hemisphere. We can get cheap and reliable base-load energy—coal, gas and nuclear energy. We have got a competitive advantage in that worldwide, and we need that competitive advantage because we can't compete with countries like China on wages because we have a higher standard of living. We should never sacrifice a higher standard of living, but if we want to be competitive we have to produce.

The next thing we need to do is to start rewarding those people who actually produce goods and services in this country. We have got an obscene tax structure in this country called payroll tax that actually taxes the employer to employ people. I suggest we bring back a stamp duty on share trading, and the money raised from share trading can be used to fund the abolition of payroll tax in this country. It is absolutely absurd that we tax people to employ people. We have six different payroll taxes in this country—six different threshold levels. For anyone trying to do payroll tax in this country, it's a compliance nightmare, but not only that; it adds to the cost of business. We've got this absurdity in this country where we charge stamp duty on real assets, like houses and businesses and farmland, but we don't charge stamp duty on paper assets. Now, 40 to 50 per cent of the Australian stock market is traded by high-frequency foreign traders who come in and scalp the market. We're rewarding that sort of rubbish, where we have the day traders and the speculators, by not having stamp duty on share trading. We've got to stop rewarding speculators and start rewarding the producers.

Let me tell you this. Freedom comes from prosperity. Freedom is the child of affluence, and prosperity comes from productivity, and it's the producers, the workers in this country, that have made this country great. It is the workers in this country who have built this country. They bled for this country, and they are the ones that should be rewarded.

Last but not least, we need to fix up our withholding tax structure in this country. I was attacked by none other than the Treasurer when I was a Senate candidate because I made the bold assertion that we should raise withholding taxes on offshore profits. What we've got in this country is a company tax rate of 30c and, depending on the tax treaty, withholding tax rates of between 0c and 15c. That gives multinationals who use foreign capital a tax advantage over domestic capital. That's because, effectively, if you make $100 here and you're a multinational, you can set up a marketing hub like BHP, Rio, Chevron and plenty of others did and you can pay all your profits—what are called above-line profits—offshore.

Take General Motors. When we were all complaining about how General Motors was broke, did anyone ever ask the question: how much in interest royalties and rent did General Motors pay offshore back to Detroit? Do you know how much it was? It was enough to make sure they never made a profit in this country, because if they made a profit here they would pay 30c on the dollar for every dollar of profit. But they shipped those profits offshore. With our withholding tax rates, there is no withholding tax rate on profits sent back to Detroit. I doubt the money went back to Detroit; it would have sat in a tax haven. I'm glad to say a few years ago the Taxation Office picked up Chevron for messing around with transfer pricing. Chevron in the US tried to charge an interest rate of nine per cent to its local subsidiary here, when the real market interest rate was two per cent.

What we have to do if we want to fix up our competitive nature and our manufacturing industry is to make sure that we raise withholding taxes and lower onshore tax rates—as well as income tax, because we should never lower company tax before we lower income tax. We've got to make it more competitive, to encourage companies to retain their earnings on shore here in Australia, because retained earnings is equity and equity is title. As a sovereign country we must maintain title of our assets, because we owe that to our children. That is why I ran for politics—to make sure our children get the same opportunities our forefathers gave to us. We cannot do that without a manufacturing industry, but we cannot do that when we have all these middlemen keeping the profits in their back pocket.

Jess Walsh (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I, too, rise to speak on the National Reconstruction Fund Corporation Bill 2023. Australia should be a country that makes things right here, because 'Australian made' means Australian jobs. That's why I rise to speak in support of this bill, which will rebuild Australian manufacturing in this country.

The National Reconstruction Fund will support and grow our economy. It will create good, secure Australian jobs and it will get Australia making things again. Our vision for a better future is one that is made right here. We should be taking advantage of all the skills and talents we have in our country. We should be using the skills we have and encouraging innovation. We have some of the best scientists and innovators in the world. If we invent it here we should make it here. We know what happens when Australia fails to back itself and fails to back our people; they go overseas and they take their skills with them. We want to empower the NRF to invest in Australians—Australian knowhow, Australian ideas, Australian ingenuity—bringing manufacturing back to our shores.

The National Reconstruction Fund is one of the largest peacetime investments in Australian manufacturing. This will be a $15 billion fund to help industries across the country seize the opportunity to invest in and develop the technologies and industries of the future. It will create secure jobs for Australian workers and drive investment in the regions that need that investment the most. It will invest in new clean and green technologies of the future. It will provide a long-term vision for the economy—a strong, diverse and productive economy. Importantly, it will be independent of the government of the day.

Based on the successful model of the Clean Energy Finance Corporation—another proud Labor legacy—the NRFC will bring government, business, industry and researchers groups together to build our industrial and manufacturing base. Guided by an investment mandate set out by the minister, the board of the National Reconstruction Fund Corporation will make arm's-length and independent investment decisions. This is about using the power of the Commonwealth to independently provide funding for the industries of the future.

The NRFC will provide finance to drive investments in seven priority areas of the Australian economy, from value-adding to our resources and agriculture, to medical science and manufacturing, to renewables and low emissions technologies, to defence and enabling capabilities, including in areas such as artificial intelligence and robotics. This is the kind of joined-up thinking this country so desperately needs. It's the long-term, sustainable thinking we need to get our country moving.

The Senate Economics Legislation Committee had the opportunity to conduct a public hearing into the bill as part of its inquiry. Evidence presented to the committee was overwhelmingly positive—positive from industry, positive from unions, positive from scientists, positive from universities and positive from climate groups as well. Indeed, all submissions to the inquiry supported this bill. The Australian Chamber of Commerce and Industry came to the hearing and said, in support of the bill:

Generally we see the NRF as an opportunity to provide funding to support businesses to develop in Australia. Currently there are a lot of opportunities for businesses—Australia is very good at research and development and innovation—but we have a lot of difficulty in then moving that research and development and innovation into production here in Australia. So the opportunities the NRF provides through the loans and guarantees will give an opportunity for those ideas to be scaled up, commercialised and produced here in Australia. That will potentially provide us with a lot of export opportunities as well.

That is a good endorsement of the bill from ACCI direct to the Senate Economics Legislation Committee in the hearing for the bill.

And there was so much more endorsement for the bill in inquiry's hearing that took place. Thomas McMahon from the Tech Council of Australia described the NRF as having 'the scope to grow new high-value industries and jobs across the country'. Heidi Lee, CEO of Beyond Zero Emissions, highlighted the opportunity and role that the NRF will have for investing in critical renewables technology that will bring down emissions and create the renewables jobs of the future. Andrew Richards, CEO of Energy Users Association of Australia, emphasised that this bill will create certainty and continuity for the renewable energy sector, with investments in technologies like wind turbines, hydrogen electrolysers and technology to modernise steel and aluminium processing.

As the rest of the world quickly embraces this technology, it is absolutely critical that we invest in the renewables sector strongly, too, and the NRF will do just that. Workers know their industries better than anyone else does. So, it was important to hear in our inquiry from the Australian Manufacturing Workers Union about how the NRF will be critical in rebuilding our domestic manufacturing and the importance of good secure jobs for workers, particularly in those regions that need to diversify—and diversify now.

The NRF is also about sovereign manufacturing and securing our supply chains. We know that to repair our broken supply chains we need to diversify and transform our industry and our economy. In medical science we will be able to use our world-leading medical research and technology to provide for essentials such as medical devices, PPE, medicines and vaccines. Greg Mullins from Research Australia told us that the NRF gets us 'in the global race' that is on right now, to do just that. In resources, we can ensure that more of the materials coming out of our Australian earth are processed right here, because if we mine it here we should make it here. In transport and defence, the NRF will improve how we transport goods and services and maximise the use of defence materials made by Australian workers. Peter Chesworth from Universities Australia agrees, stating that the NRF represents 'a direct investment in the nation's sovereign capability'.

It's time to fix our broken supply chains. It's time to rebuild our sovereign capability. As Professor Ian Chubb from the Australian Academy of Science put it, 'It takes business, government and the research sector to work together.' This is what the NRF will do. Submitters to the inquiry understood what those opposite seem not to understand: that there's a global race for capital and a global race for talent, and the NRF allows us to compete in that race. We can't afford to wait, as so many submitters to the inquiry told us.

This government is committed to both our existing and our emerging manufacturing sector, and we are delivering on it—something those opposite had nearly a decade to do. But what did we get from them in that time? We got nine different industry ministers in nine years and a government that literally goaded the car industry to leave this country and drove Australian manufacturing off a cliff. For too long, while those opposite were in government, decisions were made in the interests of the coalition and their mates, not in the interests of Australia. Today, again they're putting some sort of political interest above creating jobs and investment for Australians.

The opposition face a choice here. It's a choice between revitalising Australian manufacturing and turning their backs on Australian manufacturers once again, just as they did when they were in government. Make no mistake: to vote against this bill is to vote against Australian jobs., to vote against Australian industry and to vote against Australian workers. Australians are at their best when they dream big, when they believe in a better future. We've seen this throughout our history, and this is what Labor governments do. It's in our DNA. We champion new ideas. We build our country up, and that's why we're committed to being a country that makes things here again—a country that invests in the technology of the future, the skills of the future, the jobs of the future and the working people of the future. The NRF will move this country forward, and I implore the Senate to move forward with us.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

I rise to speak in support of the National Reconstruction Fund Corporation Bill 2023, and I wish to associate myself with the remarks of my colleagues, particularly Senator Allman-Payne, who has been the Greens spokesperson on this bill. I commend her and others in the Greens team for their detailed work on this bill and the improvements to this bill that she and the team have been able to achieve.

As Senator Allman-Payne noted in her speech, the Greens took a clear policy to the last election: a $15 billion 'Made in Australia' bank and manufacturing fund to support manufacturing in Australia. So, with that, it's no surprise that we will be supporting this bill. But we have been able to get improvements to this bill which show the importance of having Greens in the parliament, fighting for a better response to the climate emergency and to protect future generations. As people know, the amendments that we were able to secure were to make sure that none of this fund went to supporting coal and gas mining or to direct support for native forest logging.

You will note that the wording of 'direct support' does leave a few loopholes, and in fact 'direct support for native forest logging' doesn't go as far as I would have liked to see. I would have liked to see that this bill did not support native forest logging or, in fact, any use of the wood products that come from native forests, because you can't have a National Reconstruction Fund that is moving Australia forward and is absolutely supporting jobs whilst at the same time you are supporting destructive industries. Just as we secured an amendment that means this fund will not be able to support coal and gas mining, which are fuelling the climate crisis and pouring petrol on the fire, we cannot think that the future of Australian manufacturing and the future of jobs in this country are going to continue to be reliant on native forest logging and the wood from native forests. Native forest logging is so last century, if not before. It should have been completely phased out. It should have been seen as an industry of the past, just as whaling was before it, because it is an industry that has been particularly destructive of our forests and it's an industry that has been superseded. Almost 90 per cent of the wood products that are produced in Australia now come from plantations, which are a much, much more ecologically sustainable way of producing the fibre that we need.

I don't want to anyone to have any confusion. Wood is a terrific material, and the wood products industry is an incredibly important industry for Australia. The potential of wood from plantations to be ecologically sustainable is incredible. But that doesn't transfer to wood from native forests. Wood plantations are basically a crop; they are grown to produce wood. That can be done in an ecologically sustainable way and can produce really high-quality wood products. There are industries—and the industries can be even greater—based upon the wood products from plantations, which basically are really sound, sustainable products.

Wood from native forests, on the other hand, relies upon destructive logging of our native forests—the industrial-scale clear-felling logging of our native forests—which has been shown to decimate our forests and forest ecosystems. There was an article in the Guardian just this morning with regard to New South Wales that showed that over half of the original forests of New South Wales had been destroyed and a vast amount of the forest that hasn't been destroyed has been degraded. Yes, you had the issue of where forests had been cleared, but the issue of the degradation of our forests by logging is a huge, huge issue and is sending our precious wildlife hurtling towards extinction. If we had no other choice, like in the era before we had plantations, you could say, 'Well, okay, wood is a good product, so we have to do this,' because you have to make those compromises. But we don't have to make that choice now. We've got the plantation stocks that we need. Yes, they can be improved, they can be added to and certainly you could have more value-adding and better use of the wood from those plantations, but we do not need the wood from native forests. Given the destructive nature of the logging of our native forests, there is absolutely no reason for why it needs to continue.

A week ago I introduced the Ending Native Forest Logging Bill. As I said in the speech that I tabled for that bill:

The Commonwealth Government has a fundamental responsibility to protect our environment. That's reflected in international commitments that the Australian government has made on the international stage, and that have been enacted through the Environment Protection and Biodiversity Conservation Act 1999.

Despite those requirements in legislation, there is a loophole that entire truckloads of logs are being driven through. That loophole is contained in the Regional Forest Agreements Act 2002.

For far too long, these regional forest agreements, or RFAs, established between the federal and state governments, have exempted native forest logging from the environmental protections we have in place. These agreements cover significant parts of Victoria, Tasmania, Western Australia, and New South Wales.

RFAs were allegedly intended to protect complex ecosystems, and ensure threatened species were protected, as well as provide sustainable timber supply, and protect jobs. In their 2020 report, Creating Jobs, Protecting Forests? The Wilderness Society concluded that RFAs have failed on every front.

…   …   …

The federal Labor party, since taking government, has comprehensively failed to address this multi-faceted crisis. There are vague statements about the need to protect our precious forests; but there is no action. The federal government has failed to act when the courts found that the Victorian government was failing to uphold its commitments under the Regional Forest Agreements. Government should act, but it has failed to.

Native forest logging has had its day. It is destroying our environment. This bill—

my bill, the Ending Native Forest Logging Bill—

would end the destruction. It would close the RFA loophole, so that the limited environmental protections we have in place would genuinely apply to forests, offering some level of protection that's greater than what we face now.

We can act, we can create change and protect our forests.

That was from my second reading speech for the Ending Native Forest Logging Bill.

Obviously the National Reconstruction Fund Corporation Bill before the Senate today isn't going to be the bill that's going to end native forest logging. But the amendment that we secured to at least make sure that money from this much-needed fund is not going to be directly supporting native forest logging is a big improvement. It's a step in the right direction, and it acknowledges—and I think it's very important, in achieving this amendment, that there is acknowledgement—that there is a difference in terms of the wood that's being produced from destructive practices in our native forests and the wood that comes from plantations.

I would hope, in fact, that there is money from the National Reconstruction Fund that goes into supporting our plantation industries; goes into supporting value-adding from our plantation industries; and goes into making sure, for example, that the wood that is currently just being chipped and exported from our plantations actually has some higher-end purposes here in Australia. At the moment, vast amounts of the plantation logs that we grow here in Australia are just being shipped offshore as whole logs or as woodchips, both softwood logs and hardwood logs. There are huge volumes of plantation logs that are being exported out of Tasmania and out of western Victoria with zero value-adding. You look at that resource and, particularly for people who are concerned about where you can get hardwood timber from to provide the wood products that we like—yes, eucalypt timber is a lovely timber to have in your home, on your floors and around your windows. It can actually be grown in plantations. But it is a travesty that the largest eucalypt sawmill in the world is actually in Uruguay. It is processing 20-year-old plantation logs to turn into flooring, window frames and other products which are being sold into the North American market. Why aren't we making much greater use, much better use, of our eucalypt plantations here, rather than just shipping them offshore?

I hope that the funding through the National Reconstruction Fund can indeed be used to support plantation wood products. We should acknowledge that that is the future if we are concerned about jobs, about manufacturing and about protecting our environment. There is a way forward, and in the areas of the wood products industry it is absolutely firmly and clearly in the area of plantation forestry.

The other thing that the amendment does is signal that subsidies for the environmental vandalism that have been provided for so long must end. It hasn't been an equal playing field. We haven't had the support that was needed for plantation industries, but there have been huge subsidies paid out to continue native forest logging. A year ago, the Sydney Morning Herald reported that taxpayers were spending $441 a hectare to log native forest, with their state owned corporation facing a net loss of $20 million. In 2021, media reports indicated that the Tasmanian state corporation was operating at a net loss of $4 million, despite government funding in the millions. The data from Victoria is more dated, but a VicForests plan from a decade ago—I can tell you it hasn't improved since—noted that 'timber from harvesting operations in the East Gippsland forest management area have not been profitable for VicForests for many years. Operations currently lose up to $5½ million per annum after distribution of corporate overheads'. For all the statements from the Labor Party that this fund wasn't going to be supporting native forest logging anyway, the history of state governments subsidising native forest logging—destructive native forest logging—is there. I would not have put it past this government to have continued those subsidies for native forest logging except for the amendment that we have been able to achieve.

Let me be clear in conclusion. We support government expenditure when it supports people and the environment, but the tragic reality is that native forest logging is wanton environmental vandalism, and it's being subsidised by state governments at a cost to many people who would be outraged to know their governments are subsidising the destruction of our precious forests. This amendment is a small step towards ending that financial support for a dying and dangerous industry, but there is more to do. Native forest logging is devastating for our climate and devastating for endangered species, and it leaves us worse off as a society and as a nation. We are supporting this bill today—particularly, from my perspective, supporting the amendment—but, on ending the logging of our native forests, we will keep fighting and we won't stop until we know that Australia's precious forests have all been protected.

Andrew Bragg (NSW, Liberal Party) Share this | Link to this | Hansard source

I rise to make some statements about the National Reconstruction Fund Corporation Bill 2023. I note at the outset the confidence that Senator Rice has in the distribution, or, perhaps, the distributional focus of the fund. This is another bill that the parliament is considering that is effectively a shell bill with no detail and that grants the minister of the day god-like powers—if you don't mind me using that expression in here, Mr Acting Deputy President O'Sullivan.

This fund is going to be part of the Albanese government's strategy to massively fuel inflation in Australia, or perhaps I should be a bit kinder and say it is part of their plan to have no plan to address inflation in Australia, which is riding at a 33-year high, at 7.8 per cent. This $15 billion fund is one of three major off-balance-sheet items where the government is seeking to appropriate $45 billion of taxpayer funds and set them up as slush funds for their favourite vested interests. The International Monetary Fund has warned against the use of these structures because they are inflationary, and inflation is driving the Reserve Bank to jack up interest rates. We've had 10 interest rate rises in a row since the election, and the government continues to spend. It's not just the off-balance-sheet items, like we see today with the reconstruction slush fund. It's also tens of billions of dollars baked into the budget in recurrent expenditure. This is the problem that the Australian people are facing in a day-to-day sense: a national government which is fuelling inflation. It is true that over the past few years federal governments have run inflationary fiscal policies. This government should be trying to put that to death, because it is hurting, in particular, lower income people, who deserve better from their government.

This is part of the key design feature of this government, which I've often called 'the government for vested interests'. When you work through the list of grievances of their best friends and backers at the unions, the super funds and the class action law firms, inevitably you come back to a bucket of cash, a big bag of cash or a sack of cash. In this case it's a $15 billion sack of cash which will be dished out in order to placate their favourite vested interests. The major problem here, though, is that, when you are only focused on the narrow vested interests of a few select parties, you don't have time to consider the major economic issues that the nation is facing. That is the major consequence of being the government for vested interests and the government which is only interested in introducing new slush funds, of which this is just one of three.

It's the Australian people who are suffering, because no-one is interested in their welfare. You're at the back of the queue if you're an everyday Australian, but you're at the head of the queue if you're a union official, a super fund, a class action law firm or just a fellow traveller with unique access. This, I would say, is probably the best example of the government for vested interests focusing on delivering cash directly to its favourite persons and organisations.

We often hear the talking points that are read out from the Labor Party senators. They're usually indistinguishable, but they often talk about this trillion dollars of Liberal Party debt. I always think that's an interesting expression. When Labor was last in office, from 2007 to 2013—they left office in 2013—their last MYEFO had a debt projection of $667 billion. I would've thought that, if the Labor Party had already racked up almost $700 billion of debt, then the so-called trillion dollars of Liberal debt must therefore be $700 billion of Labor Party debt and perhaps the balance incurred through the COVID period. I think that's always an important stat to remind the chamber of: that the 2013-14 MYEFO records that $667 billion was the Labor Party's debt trajectory for this nation. I urge the chamber—through you, Mr Acting Deputy President—to consider that.

This bill, as I say, is a shell bill. It sets up this corporation with very little detail on what exactly it will be doing in terms of its priorities, its investment objective and its investment capability. The priorities are to be set by a minister in due course. These are to be disallowable, and then the mandate of the fund is to be non-disallowable. We have a very interesting distinction there. We're going to see the priorities set by a minister. They could be disallowable and they could, of course, be anything. I make these remarks in a most constructive way, but I note Senator Rice's confidence about how the funds may or may not be invested. Effectively, this bill allows the minister to set any priority. The priority could be that the Senate should have a different tinge of red. It could be that we should have a very good economy. Any platitude could be the priority. It could be that Australia should have a strong and fair economy and be a nice country. It could be anything. My point is that the broad shell of the bill is not helped by having a great big woolly priority attached to it which is disallowable. If this is a concession then I'll eat my hat.

The key here will be the investment mandate, which is not disallowable by this chamber, and the investment mandate will be set by the minister, not by the board. This is held out to be an independent entity, I understand. We discussed this at the estimates process, and we also had a very good committee inquiry, conducted by Senator Walsh and the economics committee, and at those hearings we were able to ascertain that the mandate and the priorities would be made by the minister, in due course, but not by the board.

The board is going to be appointed, and there will be a range of different people on the board. I think there have been some concerns raised by stakeholders on these matters: the Australian Chamber of Commerce and Industry have noted that the legislation lists industrial relations as a relevant skill set, so you might find you've got a few people with that skill set on the board. I don't know. It might be a bit like the Senate—there could be a lot of people from that area. That's going to be one of the criteria to be on the board. But it probably doesn't matter that much because the board is going to be a toothless tiger. The board isn't going to be setting the priorities, which will be woolly. It's not going to set the investment objectives or anything like that. That's going to be done by the minister. So what's the board going to do? They might poke around with a few tiddlywinks and find a few pieces of paper and a few rats to rub together. But the board isn't going to be doing too much, is it? The board has been neutered. Maybe they will pick people that have industrial relations as a skill set, stick them in there, make their disallowable instrument and stick the money where they want it to go, and that will be the end of it.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

What could go wrong!

Andrew Bragg (NSW, Liberal Party) Share this | Link to this | Hansard source

It sounds good, doesn't it? I think the governance of this fund is going to be very interesting, and we will watch this with interest. Obviously, we'll be voting against this inflationary slush fund, but we will keep a close eye on the governance of this fund. It's been neutered in its own shell bill, but the government will, I'm sure, want to issue press releases in future years saying that the very independent, very highly skilled board has made these judgements about various matters.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

Especially if it goes wrong.

Andrew Bragg (NSW, Liberal Party) Share this | Link to this | Hansard source

That's right. I don't want to take much more of the Senate's time, because it has already been very generous, but I want to make one more comment about this bill in relation to AUKUS. There was a newspaper article in the Australian back on 13 February 2023 titled 'Coalition "putting nation's security at risk": industry minister Ed Husic'. That's what the Australian said. It goes on to say that apparently if this bill isn't passed AUKUS will fall over and it will be a disaster and that there will be major issues in terms of our security if this very important fund doesn't pass. So I thought, 'Well, that's an important statement the minister's made; I'd better just see whether that's right.' We had the hearing on 22 February looking into the bill, which was really well chaired by Senator Walsh. I'll put on the record the very good way that that committee has been run. I said to the department, who turned up:

Thanks very much, Chair. Good afternoon. Has the department provided any briefing or advice to the minister that if the NRF is not passed it would have a direct impact on the AUKUS agreement?

The official, Ms Narelle Luchetti, who is the head of the Manufacturing and National Reconstruction Fund Division, said, 'No, we haven't.' Okay; that's good to know. And then I thought, just to make sure that I'm not going completely bonkers, because sometimes I get a bit confused—

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

Just a little!

Andrew Bragg (NSW, Liberal Party) Share this | Link to this | Hansard source

Just to make sure, I said:

Has the department provided any briefing or advice to the minister that if the NRF is not passed it would have a direct impact on Australia's national security?

And Ms Luchetti said, 'No, we haven't.' So I think we can put that to bed. AUKUS is going to be safe if we vote against this bill, which we will.

In summary, I do believe that the Australian people deserve a government that is prepared to fight inflation and is prepared to take the lessons of the past and listen to the IMF and other esteemed organisations that are telling the government to restrain spending and stop the off-balance-sheet items. In relation to the governance of this fund, we will watch very closely how it unfolds in future years. I think it's very questionable and I think potentially very problematic. But it is a huge sum of money, so I'm sure many people will be looking at that and we will be voting against this bill—with confidence that AUKUS will be able to continue as it has, as a bipartisan arrangement.

Anthony Chisholm (Queensland, Australian Labor Party, Assistant Minister for Education) Share this | Link to this | Hansard source

I think Senator Bragg was trying to angle to get a few of his crypto bros on the board of this new entity, maybe! But often when I hear Senator Bragg's contribution, I wonder whether we actually do live on the same planet, because Senator Bragg obviously hasn't met any of the Australians who were concerned about what went on over the past couple of years, during the pandemic, which highlighted our lack of sovereign capability. I certainly heard that a lot when I was out and about around Queensland. I know the Prime Minister did, too, which is why he put forward this proposal for a national reconstruction fund when we were in opposition—because he knew we needed to learn those lessons from what went on during COVID and our lack of sovereign capability and he wanted, if we were lucky enough to form government, to do something about it. And that's exactly what we are proposing to do. It was something we campaigned on strongly in opposition. I think that was well received. And it's something we really want to deliver on in government and get on with, because we understand that the Australian people want to support and see more manufacturing in this country, and that's exactly what the National Reconstruction Fund Corporation Bill 2023 is about.

Think about what was highlighted during COVID: the lack of PPE and the impact that had on aged care and health and the fact that we couldn't produce enough of our own to supply people; how we were at the back of the queue for the vaccines because we didn't have our own manufacturing capability. There were so many examples over the past couple of years showing the damage from the neglect of the last 10 years of the previous government. Manufacturing in this country had suffered. It's something that, as a government, proudly, we want to correct. We want to fix it, we want to create those opportunities, and we think this bill is a great opportunity to do that and to really start turning the corner and providing those opportunities for the Australian people.

Under the previous government, tens of thousands of manufacturing jobs were lost in Australia, causing manufacturing to account for a smaller share of national employment than in any other OECD country. That's how much manufacturing declined in Australia over the last decade. It saw Australia hit the lowest levels of manufacturing self-sufficiency of any OECD country. As I said, in opposition we made a commitment to rebuilding Australian manufacturing and ensuring we become a country that makes things again. That's what Australians voted for and that's what we are delivering with this bill today.

The National Reconstruction Fund represents one of the biggest investments in our manufacturing capacity ever. The fund will be modelled on the successful Clean Energy Finance Corporation, a body set up by a previous Labor government—once again, opposed by the coalition—which has been an outstanding success. That's why we've modelled the National Reconstruction Fund on the CEFC—because it is a proven vehicle that has worked for more 10 years. It's unlocked $2.60 in private sector investment for every dollar it invests. So it actually produces a return, which I think is smart economics and smart government policy. The reconstruction fund will be governed by an independent board and will be empowered to co-invest in projects through loans, guarantees, and equity, partnering with institutional investors, private equity and venture capital. It will invest in strategic priority areas, like: value adding in resources, renewables, and low-emissions technology; transport: agriculture; forestry; fisheries; and a wide range of other industries. Importantly, it will help to grow a more resilient and diversified economy that will create more jobs—and I think it will particularly create more jobs in regional Australia.

There are over 90,000 manufacturing firms in Australia, and one-third of those are in regional areas. My home state of Queensland has more regional based manufacturing firms than any other state in the country. Our agriculture industry is turning sugarcane waste into biofuels in Burdekin. We have impressive projects and companies like Tritium are exporting high-tech EV chargers around the world. In Gladstone we're seeing the development of new hydrogen facilities, as well as companies like Rio Tinto, which has significant operations in Gladstone, considering proposals to build four gigawatts worth of solar and wind capacity to power manufacturing in the region in the future. In manufacturing we've seen the success the state government has had by building trains in Maryborough. That has revitalised the town. We also saw this week a deal announced to manufacture in Ipswich the Boxer combat vehicles that will be exported to Germany as well.

Importantly, our resources sector powers Australia. With new opportunities in renewables and critical minerals, regional Queensland can continue to be the powerhouse of our economy. The National Reconstruction Fund is going to open up even more opportunities for regional Queensland, and the government will be driving those. Unfortunately, the Queensland Liberals and Nationals on the opposition benches are voting against these opportunities. But it's not always because they think this is a bad idea. Just look at what Colin Boyce, the member for Flynn, told 4RO radio in Central Queensland last week. When asked if he could see the benefits of the National Reconstruction Fund for regional Queensland he said, 'Absolutely.' He also said that, if money in this fund were directed towards agriculture, he would certainly welcome it. I don't know if the member for Flynn has had a look at this policy, which Labor announced before the election. If he had, he would have seen that the National Reconstruction Fund will absolutely be directing funds towards agriculture. In fact, we've reserved $500 million for funding of the agriculture sector and opportunities there.

They can see the benefits for regional Queensland and they welcome the funding in sectors that we are supporting, but still the member for Flynn, along with the member for Capricornia and the member for Hinkler, stood in the other chamber and voted against this legislation. They voted against a $15 billion fund that will support more regional Queensland businesses and they voted against secure, local and decent jobs for workers across communities in regional Queensland. They are too busy playing politics and voted against the interests of their own communities.

There is no doubt that Australians want to see a future made in Australia. That's why they voted for an Albanese Labor government, and that's exactly what we will be delivering on with the passage of this bill.

David Van (Victoria, Liberal Party) Share this | Link to this | Hansard source

Senator Chisholm may be a little bit Queensland myopic, but I remind him that in Victoria we did manufacture two million AstraZeneca vaccines at CSL. He said that we didn't manufacture vaccines, but I point out to him that we actually did. I also point out that we secured an mRNA manufacturing facility in Victoria to manufacture mRNA vaccines and other therapeutics. But he just ignored all those things that we did.

Let us be clear—and there are no two ways to spin this—the economy is struggling under the Albanese government. Bills are up, mortgages are up, taxes are up and inflation is increasing. No amount of political spin will enable the government to talk their way out of the fact that life is harder under Labor. Right now we need sensible policy. The best way to implement sensible policy is to listen to the experts. When times are tough, like under COVID-19, you must listen to the experts. That's what got us through the pandemic better than almost any other country in the world.

What have the economic experts said about the National Reconstruction Fund that the National Reconstruction Fund Corporation Bill 2023 enables? In the IMF's report they state that implementation of below-the-line activity through newly created investment vehicles—and the National Reconstruction Fund accounts for $15 billion, Rewiring the Nation accounts for another $20 billion and the Housing Australia Future Fund costs another $10 billion—should be avoided. I'll say that again for those in the chamber who do not hear: newly created investment vehicles, like the National Reconstruction Fund, should be avoided.

Anthony Chisholm (Queensland, Australian Labor Party, Assistant Minister for Education) Share this | Link to this | Hansard source

Why?

David Van (Victoria, Liberal Party) Share this | Link to this | Hansard source

I can hear Senator Chisholm asking why. It's because they're inflationary! That's $45 billion of inflationary spending that this government is not putting through the budget.

The economic experts at the IMF have assessed this government's key policies, such as the National Reconstruction Fund, Rewiring the Nation and the Housing Australia Future Fund, and said that these are a bad idea. And it's not just the IMF and the coalition saying that the Albanese government is implementing bad policy: the IMF has countered against this strongly and yet the government is intent on forging along with their ideological approach to governing and implementing their policies, despite being told that they'll make life harder for Australians. I just don't know how those opposite can do that. There are no two ways about it: this bill will not improve the lives of Australians, it will only make things harder. The government may as well change the name of this bill from the National Reconstruction Fund to the 'Labor slush fund', because all it's going to do is pick mates and throw taxpayer dollars into projects that people, such as the IMF, have said should be avoided.

This bill also has the potential to contribute to the increase in inflation, which is already skyrocketing under the Labor government. The legislation's intent is to borrow $5 billion of the $15 billion up-front, increasing the interest bill for Australians. This off-budget funding of $15 billion, in conjunction with the other off-budget policies that I've talked about, will increase government spending and drive up inflationary pressures. The government can't say that this won't happen, because the minister's own department admitted at Senate estimates that they had done no modelling on the inflationary impact of the National Reconstruction Fund. And this is at a time when Australians are suffering through a cost-of-living crisis. Energy prices are rising and mortgages and rents are rising; it astounds me that those opposite wouldn't at least to some modelling on this fund.

With its $45 billion in off-budget spending, the Albanese government is going on a political spending spree while the rest of Australia is tightening its belt. The RBA is looking to lower inflation, and this government seems to think that it's a good idea to push inflationary pressures up. But, again, we know that what has become clear with this government is they're great at making promises but not at keeping them. The PM promised to lower power bills by $275 on 97 occasions—I'll add that in there—and has not delivered them. In fact, they've gone up. Those opposite promised cheaper mortgages and have not delivered those either. They promised they would not make changes to super and we've had the world-class Olympic backflip which just happened on that. They promised cheaper medicines and better access to health care, and they have broken those promises. And they promised an aged-care pay rise but have broken that promise. That's just to name a few.

However, back to this bill. Despite the Labor government campaigning in the election on accountability and transparency, this bill lacks any of the checks and balances necessary for good governance. For a $15 billion fund, it's absurd that this legislation only proposes a five-yearly review of the act. It must, at the very least, be annual. On top of this, the bill will allow the corporation to keep investments anonymous. Where's the transparency, guys? As Research Australia stated in the Senate economics hearings, there's no apparent reason that the default position should be that the identities of recipients of NRF investments be kept secret. Rather, it's the other way around.

Not only does the National Reconstruction Fund lack transparency and integrity it's just simply a poor funding model, shifting from a competitive grant program which the coalition implemented through the Modern Manufacturing Initiative—and I have visited many dozens of companies which have got to an economic position where they can survive and go to market through that—to one where this government is providing equity and loans. Government equity and loan schemes are less successful than grants, and manufacturers may struggle to meet the return on investment thresholds or to put together a detailed business cases in house. And what will happen to failed or failing loans? It's clear that last experiment down this path by a Labor government, the Victorian Economic Development Corporation, almost destroyed the Victorian economy. We have to think about what this one is going to do to the Australian economy. It risks drowning out private investment, and this is also terribly concerning.

It also begs the question: if there are such great investment opportunities the government will acquire equity in, why hasn't the private sector already taken advantage of these lucrative opportunities? We must not overlook the importance of retaining ownership, especially given many of our manufacturers are family owned businesses. Are the government going to appoint directors to the boards of these family owned businesses? If so, who are they? My guess would be their union mates because that's how they roll. The bill will also stifle inflation as beneficiaries of the fund will be unlikely to invest in innovation without a guaranteed return. This funding model does not entertain failure, which is inherent in being able to innovate.

What is most concerning to me is how the government has attempted to politicise national security and AUKUS to try to support this slush fund. The Department of Industry, Science and Resources stated in committee hearings that they had provided no advice or briefings to the minister, who stated that, if the national reconstruction fund bill were not to pass, it would have implications for the AUKUS agreement.

When the minister introduced the national reconstruction fund bill, he didn't mention the words AUKUS or national security once. If the NRF was about national security, then why did Labor cut the space industry out of their priorities? If Labor are so concerned about defence manufacturing, why have they held up millions of dollars in funding to critical defence manufacturing projects funded through the Modern Manufacturing Strategy? Or how about they start looking at supporting many of our great SME defence companies whose products are being sent around the world and integrated into foreign armies, being used in conflicts such as that in Ukraine, but who cannot get any acquisition support here in Australia.

Actions speak louder than words, and this government isn't supporting our defence SMEs. They've delayed projects because of the DSR, and let's point out that they've delayed them until after the New South Wales state election and after the Aston by-election. They're undermining national security by drawing it into this political vehicle and they're undermining AUKUS with a concerning increase in the number of Labor backbenchers speaking against the AUKUS deal. National security and the AUKUS agreement should be bipartisan and above the politics of the day. It's absolutely disgraceful that the minister has attempted to tie it to this political slush fund.

It is clear, at least to me and the people on this side of the chamber, that this bill should not pass. It's riddled with problems. There are parts of it the government cannot explain as to why or how this will improve the lives of Australians. It's clear that it's going to be inflationary, that inflation is running away and hurting Australians every day in their household budgets, in their mortgage repayments, in their credit card repayments, in their car repayments—everything that they use in their daily life. They are simply paying more under this government. So how this government can look Australians in the face and add more inflationary pressures to the back pockets of our hardworking Australians is completely beyond me.

I call on this government to scrap this fund. I call on the Senate to vote against this fund because I cannot, in all good conscience, support this bill. Thank you.